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
12.7% = 8.4% × 0.31 × 4.87
Latest: FY2026
Profitability
Net Margin
8.4%
12.5% →8.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.39x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.87x
4.79x →4.87x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.5 pp over 5 years. Driven by net margin declining (12.5% → 8.4%). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.5% | 0.39 | 4.79 | 23.2% |
| FY2023 | ₹0Cr | ₹0Cr | 8.1% | 0.38 | 4.92 | 15.0% |
| FY2024 | ₹0Cr | ₹0Cr | 13.7% | 0.42 | 4.46 | 25.7% |
| FY2025 | ₹0Cr | ₹0Cr | 11.0% | 0.31 | 5.13 | 17.7% |
| FY2026 | ₹0Cr | ₹0Cr | 8.4% | 0.31 | 4.87 | 12.7% |
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.