DuPont Decomposition
Why does ADVAIT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.9% = 7.8% × 0.81 × 2.37
Latest: FY2025
Profitability
Net Margin
7.8%
6.8% →7.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
0.96x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.37x
2.22x →2.37x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~15%. Driven by asset turnover declining (0.96x → 0.81x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.8% | 0.96 | 2.22 | 14.5% |
| FY2023 | ₹0Cr | ₹0Cr | 8.3% | 0.88 | 2.53 | 18.4% |
| FY2024 | ₹0Cr | ₹0Cr | 10.6% | 1.04 | 2.66 | 29.2% |
| FY2025 | ₹0Cr | ₹0Cr | 7.8% | 0.81 | 2.37 | 14.9% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.