DuPont Decomposition
Why does ASHOKLEY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
24.4% = 6.2% × 0.55 × 7.09
Latest: FY2026
Profitability
Net Margin
6.2%
-1.4% →6.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.60x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
7.09x
5.97x →7.09x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 29.3 pp over 5 years. Driven by net margin improving (-1.4% → 6.2%), leverage rising (5.97x → 7.09x). 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 | -1.4% | 0.60 | 5.97 | -4.9% |
| FY2023 | ₹0Cr | ₹0Cr | 3.0% | 0.76 | 6.40 | 14.5% |
| FY2024 | ₹0Cr | ₹0Cr | 5.5% | 0.67 | 7.51 | 27.6% |
| FY2025 | ₹0Cr | ₹0Cr | 6.4% | 0.59 | 6.68 | 25.4% |
| FY2026 | ₹0Cr | ₹0Cr | 6.2% | 0.55 | 7.09 | 24.4% |
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.