DuPont Decomposition
Why does ARFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.1% = 2.5% × 1.66 × 2.18
Latest: FY2026
Profitability
Net Margin
2.5%
1.8% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.66x
2.13x →1.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.18x
3.18x →2.18x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.8 pp over 5 years. Driven by asset turnover declining (2.13x → 1.66x), leverage falling (3.18x → 2.18x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.8% | 2.13 | 3.18 | 11.8% |
| FY2023 | ₹0Cr | ₹0Cr | 1.9% | 2.04 | 3.03 | 11.7% |
| FY2024 | ₹0Cr | ₹0Cr | 1.5% | 1.87 | 2.96 | 8.5% |
| FY2025 | ₹0Cr | ₹0Cr | 1.5% | 1.79 | 2.20 | 5.8% |
| FY2026 | ₹0Cr | ₹0Cr | 2.5% | 1.66 | 2.18 | 9.1% |
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.