DuPont Decomposition
Why does APCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-37.4% = -18.9% × 0.45 × 4.37
Latest: FY2025
Profitability
Net Margin
-18.9%
-8.8% →-18.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.45x
0.64x →0.45x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.37x
3.12x →4.37x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 19.9 pp over 3 years. Driven by net margin declining (-8.8% → -18.9%), asset turnover declining (0.64x → 0.45x), leverage rising (3.12x → 4.37x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -8.8% | 0.64 | 3.12 | -17.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -6.3% | 0.62 | 3.40 | -13.3% |
| FY2025 | ₹0Cr | ₹-0Cr | -18.9% | 0.45 | 4.37 | -37.4% |
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.