DuPont Decomposition
Why does ARCHIES earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-3.4% = -7.8% × 0.30 × 1.48
Latest: FY2026
Profitability
Net Margin
-7.8%
-3.5% →-7.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.30x
0.41x →0.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.48x
1.77x →1.48x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~-3%. Driven by net margin declining (-3.5% → -7.8%), asset turnover declining (0.41x → 0.30x), leverage falling (1.77x → 1.48x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -3.5% | 0.41 | 1.77 | -2.5% |
| FY2023 | ₹0Cr | ₹0Cr | 2.9% | 0.47 | 1.64 | 2.2% |
| FY2024 | ₹0Cr | ₹-0Cr | -10.3% | 0.46 | 1.73 | -8.3% |
| FY2025 | ₹0Cr | ₹-0Cr | -2.1% | 0.35 | 1.51 | -1.1% |
| FY2026 | ₹0Cr | ₹-0Cr | -7.8% | 0.30 | 1.48 | -3.4% |
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.