DuPont Decomposition
Why does AKI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.6% = 2.1% × 0.68 × 1.76
Latest: FY2025
Profitability
Net Margin
2.1%
2.7% →2.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
1.01x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.76x
4.30x →1.76x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.1 pp over 4 years. Driven by asset turnover declining (1.01x → 0.68x), leverage falling (4.30x → 1.76x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.7% | 1.01 | 4.30 | 11.7% |
| FY2023 | ₹0Cr | ₹0Cr | 1.6% | 1.11 | 4.22 | 7.7% |
| FY2024 | ₹0Cr | ₹0Cr | 1.9% | 0.68 | 1.74 | 2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.1% | 0.68 | 1.76 | 2.6% |
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.