DuPont Decomposition
Why does ARMANFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.1% = 9.3% × 0.22 × 3.00
Latest: FY2026
Profitability
Net Margin
9.3%
14.2% →9.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.22x
0.18x →0.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.00x
5.84x →3.00x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.9 pp over 5 years. Driven by net margin declining (14.2% → 9.3%), leverage falling (5.84x → 3.00x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.2% | 0.18 | 5.84 | 14.9% |
| FY2023 | ₹0Cr | ₹0Cr | 24.1% | 0.19 | 5.57 | 25.6% |
| FY2024 | ₹0Cr | ₹0Cr | 28.2% | 0.23 | 3.24 | 21.4% |
| FY2025 | ₹0Cr | ₹0Cr | 8.1% | 0.29 | 2.55 | 6.0% |
| FY2026 | ₹0Cr | ₹0Cr | 9.3% | 0.22 | 3.00 | 6.1% |
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.