DuPont Decomposition
Why does ADVANCE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.4% = 5.1% × 1.43 × 3.48
Latest: FY2025
Profitability
Net Margin
5.1%
3.6% →5.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.43x
2.11x →1.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.48x
3.33x →3.48x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~25%. Driven by net margin improving (3.6% → 5.1%), asset turnover declining (2.11x → 1.43x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.6% | 2.11 | 3.33 | 25.2% |
| FY2023 | ₹0Cr | ₹0Cr | 3.7% | 2.21 | 3.55 | 29.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.4% | 1.75 | 3.45 | 32.9% |
| FY2025 | ₹0Cr | ₹0Cr | 5.1% | 1.43 | 3.48 | 25.4% |
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.