DuPont Decomposition
Why does AVTNPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.5% = 8.7% × 0.74 × 1.48
Latest: FY2025
Profitability
Net Margin
8.7%
10.5% →8.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.74x
0.26x →0.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.48x
1.21x →1.48x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.2 pp over 3 years. Driven by net margin declining (10.5% → 8.7%), asset turnover improving (0.26x → 0.74x), leverage rising (1.21x → 1.48x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 10.5% | 0.26 | 1.21 | 3.3% |
| FY2024 | ₹0Cr | ₹0Cr | 8.8% | 0.21 | 1.27 | 2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 8.7% | 0.74 | 1.48 | 9.5% |
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.