DuPont Decomposition
Why does ARVINDFASN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-3.0% = -0.8% × 1.21 × 3.27
Latest: FY2025
Profitability
Net Margin
-0.8%
2.0% →-0.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.21x
1.20x →1.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.27x
4.04x →3.27x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.6 pp over 3 years. Driven by net margin declining (2.0% → -0.8%), leverage falling (4.04x → 3.27x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.0% | 1.20 | 4.04 | 9.6% |
| FY2024 | ₹0Cr | ₹0Cr | 3.2% | 1.18 | 3.60 | 13.7% |
| FY2025 | ₹0Cr | ₹-0Cr | -0.8% | 1.21 | 3.27 | -3.0% |
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.