DuPont Decomposition
Why does AMBUJACEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.5% = 12.5% × 0.41 × 1.27
Latest: FY2025
Profitability
Net Margin
12.5%
9.6% →12.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.41x
0.15x →0.41x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.27x
1.63x →1.27x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.1 pp over 3 years. Driven by net margin improving (9.6% → 12.5%), asset turnover improving (0.15x → 0.41x), leverage falling (1.63x → 1.27x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.6% | 0.15 | 1.63 | 2.4% |
| FY2024 | ₹0Cr | ₹0Cr | 17.1% | 0.14 | 1.58 | 3.7% |
| FY2025 | ₹0Cr | ₹0Cr | 12.5% | 0.41 | 1.27 | 6.5% |
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.