DuPont Decomposition
Why does ARSSBL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.6% = 17.5% × 0.10 × 5.27
Latest: FY2026
Profitability
Net Margin
17.5%
13.3% →17.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.10x
0.28x →0.10x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.27x
5.90x →5.27x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.8 pp over 5 years. Driven by net margin improving (13.3% → 17.5%), asset turnover declining (0.28x → 0.10x), leverage falling (5.90x → 5.27x). 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 | 13.3% | 0.28 | 5.90 | 22.3% |
| FY2023 | ₹0Cr | ₹0Cr | 8.9% | 0.26 | 6.14 | 14.2% |
| FY2024 | ₹0Cr | ₹0Cr | 13.1% | 0.23 | 6.58 | 19.7% |
| FY2025 | ₹0Cr | ₹0Cr | 14.7% | 0.21 | 6.68 | 20.6% |
| FY2026 | ₹0Cr | ₹0Cr | 17.5% | 0.10 | 5.27 | 9.6% |
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.