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
6.0% = 8.4% × 0.28 × 2.55
Latest: FY2025
Profitability
Net Margin
8.4%
25.5% →8.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.28x
0.05x →0.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.55x
2.47x →2.55x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.9 pp over 3 years. Driven by net margin declining (25.5% → 8.4%), asset turnover improving (0.05x → 0.28x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 25.5% | 0.05 | 2.47 | 3.1% |
| FY2024 | ₹0Cr | ₹0Cr | 27.8% | 0.07 | 3.24 | 6.3% |
| FY2025 | ₹0Cr | ₹0Cr | 8.4% | 0.28 | 2.55 | 6.0% |
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.