DuPont Decomposition
Why does ARCHIDPLY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.1% = 1.2% × 1.73 × 3.46
Latest: FY2026
Profitability
Net Margin
1.2%
2.8% →1.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.73x
1.53x →1.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.46x
2.16x →3.46x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.0 pp over 5 years. Driven by net margin declining (2.8% → 1.2%), asset turnover improving (1.53x → 1.73x), leverage rising (2.16x → 3.46x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.8% | 1.53 | 2.16 | 9.2% |
| FY2023 | ₹0Cr | ₹0Cr | 2.9% | 1.70 | 2.39 | 11.8% |
| FY2024 | ₹0Cr | ₹0Cr | 1.6% | 1.33 | 2.93 | 6.4% |
| FY2025 | ₹0Cr | ₹-0Cr | -1.3% | 1.42 | 3.78 | -7.1% |
| FY2026 | ₹0Cr | ₹0Cr | 1.2% | 1.73 | 3.46 | 7.1% |
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.