DuPont Decomposition
Why does AVROIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.6% = 3.9% × 0.67 × 1.38
Latest: FY2025
Profitability
Net Margin
3.9%
4.6% →3.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.67x
1.73x →0.67x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.38x
1.80x →1.38x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.8 pp over 4 years. Driven by asset turnover declining (1.73x → 0.67x), leverage falling (1.80x → 1.38x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.6% | 1.73 | 1.80 | 14.4% |
| FY2023 | ₹0Cr | ₹0Cr | 5.2% | 1.95 | 1.65 | 16.7% |
| FY2024 | ₹0Cr | ₹0Cr | 4.3% | 1.71 | 1.89 | 14.0% |
| FY2025 | ₹0Cr | ₹0Cr | 3.9% | 0.67 | 1.38 | 3.6% |
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.