DuPont Decomposition
Why does ASAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
76.5% = 3.1% × 2.66 × 9.27
Latest: FY2026
Profitability
Net Margin
3.1%
2.2% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.66x
2.63x →2.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.27x
33.69x →9.27x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 115.5 pp over 2 years. Driven by leverage falling (33.69x → 9.27x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2025 | ₹0Cr | ₹0Cr | 2.2% | 2.63 | 33.69 | 192.1% |
| FY2026 | ₹0Cr | ₹0Cr | 3.1% | 2.66 | 9.27 | 76.5% |
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.