DuPont Decomposition
Why does ARIHANTCAP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.1% = 25.3% × 0.11 × 2.49
Latest: FY2026
Profitability
Net Margin
25.3%
52.0% →25.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.11x
0.17x →0.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.49x
2.53x →2.49x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.9 pp over 5 years. Driven by net margin declining (52.0% → 25.3%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 52.0% | 0.17 | 2.53 | 22.0% |
| FY2023 | ₹0Cr | ₹0Cr | 36.7% | 0.15 | 2.03 | 11.3% |
| FY2024 | ₹0Cr | ₹0Cr | 57.9% | 0.16 | 2.42 | 21.9% |
| FY2025 | ₹0Cr | ₹0Cr | 42.2% | 0.18 | 2.05 | 15.3% |
| FY2026 | ₹0Cr | ₹0Cr | 25.3% | 0.11 | 2.49 | 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.