DuPont Decomposition
Why does AKSHARCHEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.8% = 1.4% × 0.83 × 1.57
Latest: FY2025
Profitability
Net Margin
1.4%
4.3% →1.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
0.91x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.57x
1.45x →1.57x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.9 pp over 4 years. Driven by net margin declining (4.3% → 1.4%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.3% | 0.91 | 1.45 | 5.7% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.3% | 0.89 | 1.31 | -0.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -6.2% | 0.79 | 1.47 | -7.2% |
| FY2025 | ₹0Cr | ₹0Cr | 1.4% | 0.83 | 1.57 | 1.8% |
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.