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
9.1% = 4.4% × 0.99 × 2.09
Latest: FY2025
Profitability
Net Margin
4.4%
4.9% →4.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.99x
1.21x →0.99x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.09x
2.07x →2.09x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.2 pp over 3 years. Driven by asset turnover declining (1.21x → 0.99x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.9% | 1.21 | 2.07 | 12.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.6% | 1.07 | 2.05 | 9.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.4% | 0.99 | 2.09 | 9.1% |
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.