DuPont Decomposition
Why does ADVANIHOTR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
32.5% = 26.9% × 0.91 × 1.32
Latest: FY2025
Profitability
Net Margin
26.9%
31.2% →26.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
1.02x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.32x
1.43x →1.32x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.1 pp over 3 years. Driven by net margin declining (31.2% → 26.9%), asset turnover declining (1.02x → 0.91x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 31.2% | 1.02 | 1.43 | 45.6% |
| FY2024 | ₹0Cr | ₹0Cr | 25.8% | 0.97 | 1.39 | 34.7% |
| FY2025 | ₹0Cr | ₹0Cr | 26.9% | 0.91 | 1.32 | 32.5% |
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.