DuPont Decomposition
Why does AVONMORE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.8% = 16.4% × 0.31 × 1.55
Latest: FY2025
Profitability
Net Margin
16.4%
41.1% →16.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.21x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
1.81x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.0 pp over 4 years. Driven by net margin declining (41.1% → 16.4%), leverage falling (1.81x → 1.55x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 41.1% | 0.21 | 1.81 | 15.7% |
| FY2023 | ₹0Cr | ₹0Cr | 55.0% | 0.47 | 1.59 | 41.5% |
| FY2024 | ₹0Cr | ₹0Cr | 10.4% | 0.23 | 1.72 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 16.4% | 0.31 | 1.55 | 7.8% |
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.