DuPont Decomposition
Why does AKG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.6% = 0.7% × 1.68 × 1.49
Latest: FY2025
Profitability
Net Margin
0.7%
1.1% →0.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.68x
3.13x →1.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.49x
1.37x →1.49x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.2 pp over 3 years. Driven by asset turnover declining (3.13x → 1.68x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.1% | 3.13 | 1.37 | 4.8% |
| FY2024 | ₹0Cr | ₹0Cr | 0.8% | 2.33 | 1.50 | 2.9% |
| FY2025 | ₹0Cr | ₹0Cr | 0.7% | 1.68 | 1.49 | 1.6% |
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.