DuPont Decomposition
Why does ALKEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.7% = 15.7% × 0.70 × 1.51
Latest: FY2026
Profitability
Net Margin
15.7%
15.7% →15.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.70x
0.75x →0.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.51x
1.63x →1.51x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.4 pp over 5 years.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.7% | 0.75 | 1.63 | 19.1% |
| FY2023 | ₹0Cr | ₹0Cr | 8.6% | 0.83 | 1.52 | 10.9% |
| FY2024 | ₹0Cr | ₹0Cr | 14.4% | 0.80 | 1.51 | 17.4% |
| FY2025 | ₹0Cr | ₹0Cr | 16.7% | 0.73 | 1.48 | 18.1% |
| FY2026 | ₹0Cr | ₹0Cr | 15.7% | 0.70 | 1.51 | 16.7% |
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.