DuPont Decomposition
Why does ALGOQUANT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
31.6% = 14.0% × 1.06 × 2.14
Latest: FY2025
Profitability
Net Margin
14.0%
21.4% →14.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.06x
0.37x →1.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.14x
1.29x →2.14x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 21.4 pp over 4 years. Driven by net margin declining (21.4% → 14.0%), asset turnover improving (0.37x → 1.06x), leverage rising (1.29x → 2.14x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 21.4% | 0.37 | 1.29 | 10.2% |
| FY2023 | ₹0Cr | ₹-0Cr | -23.3% | 0.20 | 2.10 | -10.0% |
| FY2024 | ₹0Cr | ₹0Cr | 19.2% | 0.42 | 4.41 | 35.7% |
| FY2025 | ₹0Cr | ₹0Cr | 14.0% | 1.06 | 2.14 | 31.6% |
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.