DuPont Decomposition
Why does AVADHSUGAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.1% = 2.1% × 0.94 × 2.56
Latest: FY2026
Profitability
Net Margin
2.1%
4.6% →2.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.94x
1.12x →0.94x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.56x
3.00x →2.56x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.2 pp over 5 years. Driven by net margin declining (4.6% → 2.1%), asset turnover declining (1.12x → 0.94x), leverage falling (3.00x → 2.56x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.6% | 1.12 | 3.00 | 15.3% |
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 1.15 | 2.71 | 11.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.8% | 0.94 | 2.78 | 12.5% |
| FY2025 | ₹0Cr | ₹0Cr | 3.3% | 0.92 | 2.62 | 8.0% |
| FY2026 | ₹0Cr | ₹0Cr | 2.1% | 0.94 | 2.56 | 5.1% |
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.