DuPont Decomposition
Why does ATL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.0% = 4.0% × 0.79 × 3.45
Latest: FY2025
Profitability
Net Margin
4.0%
8.2% →4.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
0.90x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.45x
3.60x →3.45x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.4 pp over 3 years. Driven by net margin declining (8.2% → 4.0%), asset turnover declining (0.90x → 0.79x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.2% | 0.90 | 3.60 | 26.4% |
| FY2024 | ₹0Cr | ₹0Cr | 6.1% | 0.93 | 3.32 | 18.7% |
| FY2025 | ₹0Cr | ₹0Cr | 4.0% | 0.79 | 3.45 | 11.0% |
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.