DuPont Decomposition
Why does AHCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.5% = 17.1% × 0.66 × 2.25
Latest: FY2025
Profitability
Net Margin
17.1%
-0.2% →17.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.67x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.25x
54.67x →2.25x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 32.4 pp over 4 years. Driven by net margin improving (-0.2% → 17.1%), leverage falling (54.67x → 2.25x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -0.2% | 0.67 | 54.67 | -6.9% |
| FY2023 | ₹0Cr | ₹0Cr | 5.2% | 1.01 | 15.13 | 78.9% |
| FY2024 | ₹0Cr | ₹0Cr | 14.5% | 0.52 | 6.09 | 45.9% |
| FY2025 | ₹0Cr | ₹0Cr | 17.1% | 0.66 | 2.25 | 25.5% |
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.