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
13.0% = 2.3% × 1.25 × 4.47
Latest: FY2026
Profitability
Net Margin
2.3%
-8.8% →2.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.25x
0.93x →1.25x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.47x
4.35x →4.47x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 48.6 pp over 5 years. Driven by net margin improving (-8.8% → 2.3%), asset turnover improving (0.93x → 1.25x). 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 | -8.8% | 0.93 | 4.35 | -35.6% |
| FY2023 | ₹0Cr | ₹0Cr | 0.9% | 1.11 | 4.04 | 4.0% |
| FY2024 | ₹0Cr | ₹0Cr | 1.9% | 1.18 | 3.60 | 8.0% |
| FY2025 | ₹0Cr | ₹-0Cr | -0.8% | 1.21 | 3.98 | -3.7% |
| FY2026 | ₹0Cr | ₹0Cr | 2.3% | 1.25 | 4.47 | 13.0% |
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.