DuPont Decomposition
Why does AFIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.7% = 33.9% × 0.14 × 1.77
Latest: FY2025
Profitability
Net Margin
33.9%
6.2% →33.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.14x
0.18x →0.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.77x
2.73x →1.77x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.7 pp over 4 years. Driven by net margin improving (6.2% → 33.9%), leverage falling (2.73x → 1.77x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.2% | 0.18 | 2.73 | 3.0% |
| FY2023 | ₹0Cr | ₹0Cr | 22.4% | 0.17 | 1.91 | 7.1% |
| FY2024 | ₹0Cr | ₹0Cr | 26.0% | 0.16 | 1.95 | 8.3% |
| FY2025 | ₹0Cr | ₹0Cr | 33.9% | 0.14 | 1.77 | 8.7% |
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.