DuPont Decomposition
Why does ARVIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.2% = 4.5% × 1.05 × 2.18
Latest: FY2026
Profitability
Net Margin
4.5%
3.1% →4.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
0.99x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.18x
2.61x →2.18x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.2 pp over 5 years. Driven by net margin improving (3.1% → 4.5%), leverage falling (2.61x → 2.18x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.1% | 0.99 | 2.61 | 8.1% |
| FY2023 | ₹0Cr | ₹0Cr | 5.0% | 1.17 | 2.07 | 12.1% |
| FY2024 | ₹0Cr | ₹0Cr | 4.5% | 1.03 | 2.05 | 9.5% |
| FY2025 | ₹0Cr | ₹0Cr | 4.2% | 1.03 | 2.14 | 9.3% |
| FY2026 | ₹0Cr | ₹0Cr | 4.5% | 1.05 | 2.18 | 10.2% |
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.