DuPont Decomposition
Why does AJANTPHARM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
24.3% = 20.1% × 0.91 × 1.32
Latest: FY2025
Profitability
Net Margin
20.1%
16.4% →20.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.79x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.32x
1.33x →1.32x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.1 pp over 3 years. Driven by net margin improving (16.4% → 20.1%), asset turnover improving (0.79x → 0.91x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.4% | 0.79 | 1.33 | 17.2% |
| FY2024 | ₹0Cr | ₹0Cr | 19.4% | 0.91 | 1.30 | 22.9% |
| FY2025 | ₹0Cr | ₹0Cr | 20.1% | 0.91 | 1.32 | 24.3% |
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.