DuPont Decomposition
Why does ARIHANTSUP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.5% = 11.0% × 0.31 × 4.20
Latest: FY2025
Profitability
Net Margin
11.0%
11.0% →11.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.38x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.20x
4.92x →4.20x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.9 pp over 3 years. Driven by leverage falling (4.92x → 4.20x). 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 | 11.0% | 0.38 | 4.92 | 20.3% |
| FY2024 | ₹0Cr | ₹0Cr | 13.6% | 0.43 | 4.48 | 25.9% |
| FY2025 | ₹0Cr | ₹0Cr | 11.0% | 0.31 | 4.20 | 14.5% |
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.