DuPont Decomposition
Why does AMBICAAGAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.5% = 0.4% × 0.55 × 2.05
Latest: FY2025
Profitability
Net Margin
0.4%
2.1% →0.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.53x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.05x
2.14x →2.05x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.9 pp over 4 years. Driven by net margin declining (2.1% → 0.4%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.1% | 0.53 | 2.14 | 2.3% |
| FY2023 | ₹0Cr | ₹0Cr | 2.2% | 0.58 | 1.94 | 2.4% |
| FY2024 | ₹0Cr | ₹-0Cr | -3.7% | 0.46 | 2.09 | -3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 0.4% | 0.55 | 2.05 | 0.5% |
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.