DuPont Decomposition
Why does AJAXENGG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.5% = 12.6% × 1.40 × 1.28
Latest: FY2025
Profitability
Net Margin
12.6%
8.7% →12.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.40x
1.04x →1.40x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.28x
1.27x →1.28x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.0 pp over 4 years. Driven by net margin improving (8.7% → 12.6%), asset turnover improving (1.04x → 1.40x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.7% | 1.04 | 1.27 | 11.4% |
| FY2023 | ₹0Cr | ₹0Cr | 11.8% | 1.19 | 1.35 | 19.0% |
| FY2024 | ₹0Cr | ₹0Cr | 12.9% | 1.41 | 1.35 | 24.5% |
| FY2025 | ₹0Cr | ₹0Cr | 12.6% | 1.40 | 1.28 | 22.5% |
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.