DuPont Decomposition
Why does AEPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.8% = 10.4% × 0.60 × 1.41
Latest: FY2025
Profitability
Net Margin
10.4%
-35.0% →10.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.60x
0.27x →0.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.41x
1.84x →1.41x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 26.1 pp over 4 years. Driven by net margin improving (-35.0% → 10.4%), asset turnover improving (0.27x → 0.60x), leverage falling (1.84x → 1.41x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -35.0% | 0.27 | 1.84 | -17.3% |
| FY2023 | ₹0Cr | ₹0Cr | 10.8% | 0.46 | 1.69 | 8.3% |
| FY2024 | ₹0Cr | ₹0Cr | 9.4% | 0.38 | 1.40 | 5.0% |
| FY2025 | ₹0Cr | ₹0Cr | 10.4% | 0.60 | 1.41 | 8.8% |
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.