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
7.7% = 0.4% × 8.21 × 2.33
Latest: FY2026
Profitability
Net Margin
0.4%
10.6% →0.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
8.21x
0.48x →8.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.33x
1.92x →2.33x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.1 pp over 5 years. Driven by net margin declining (10.6% → 0.4%), asset turnover improving (0.48x → 8.21x), leverage rising (1.92x → 2.33x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.6% | 0.48 | 1.92 | 9.8% |
| FY2023 | ₹0Cr | ₹0Cr | 6.2% | 0.61 | 2.25 | 8.5% |
| FY2024 | ₹0Cr | ₹0Cr | 6.7% | 0.46 | 3.11 | 9.6% |
| FY2025 | ₹0Cr | ₹0Cr | 3.1% | 1.07 | 2.85 | 9.5% |
| FY2026 | ₹0Cr | ₹0Cr | 0.4% | 8.21 | 2.33 | 7.7% |
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.