DuPont Decomposition
Why does ASAHIINDIA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.1% = 8.2% × 0.67 × 2.57
Latest: FY2025
Profitability
Net Margin
8.2%
6.3% →8.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.67x
0.23x →0.67x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.57x
2.21x →2.57x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.8 pp over 3 years. Driven by net margin improving (6.3% → 8.2%), asset turnover improving (0.23x → 0.67x), leverage rising (2.21x → 2.57x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 0.23 | 2.21 | 3.3% |
| FY2024 | ₹0Cr | ₹0Cr | 6.6% | 0.20 | 2.34 | 3.1% |
| FY2025 | ₹0Cr | ₹0Cr | 8.2% | 0.67 | 2.57 | 14.1% |
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.