DuPont Decomposition
Why does ASHIANA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.4% = 3.5% × 0.15 × 4.57
Latest: FY2025
Profitability
Net Margin
3.5%
7.0% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.15x
0.18x →0.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.57x
2.90x →4.57x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.3 pp over 3 years. Driven by net margin declining (7.0% → 3.5%), leverage rising (2.90x → 4.57x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.0% | 0.18 | 2.90 | 3.7% |
| FY2024 | ₹0Cr | ₹0Cr | 8.9% | 0.39 | 3.12 | 10.8% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 0.15 | 4.57 | 2.4% |
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.