DuPont Decomposition
Why does AFSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.3% = 3.3% × 1.07 × 2.63
Latest: FY2025
Profitability
Net Margin
3.3%
10.6% →3.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.07x
0.48x →1.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.63x
1.64x →2.63x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~9%. Driven by net margin declining (10.6% → 3.3%), asset turnover improving (0.48x → 1.07x), leverage rising (1.64x → 2.63x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.6% | 0.48 | 1.64 | 8.4% |
| FY2023 | ₹0Cr | ₹0Cr | 4.0% | 0.31 | 2.25 | 2.7% |
| FY2024 | ₹0Cr | ₹0Cr | 8.4% | 0.09 | 3.11 | 2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 3.3% | 1.07 | 2.63 | 9.3% |
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.