DuPont Decomposition
Why does AIROLAM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.7% = 1.3% × 0.99 × 2.99
Latest: FY2025
Profitability
Net Margin
1.3%
3.8% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.99x
1.06x →0.99x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.99x
2.84x →2.99x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.8 pp over 4 years. Driven by net margin declining (3.8% → 1.3%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.8% | 1.06 | 2.84 | 11.6% |
| FY2023 | ₹0Cr | ₹0Cr | 3.7% | 1.23 | 2.53 | 11.6% |
| FY2024 | ₹0Cr | ₹0Cr | 3.8% | 1.07 | 2.74 | 11.2% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 0.99 | 2.99 | 3.7% |
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.