DuPont Decomposition
Why does AWHCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.9% = 9.2% × 0.56 × 2.51
Latest: FY2025
Profitability
Net Margin
9.2%
10.5% →9.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.56x
0.67x →0.56x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.51x
2.31x →2.51x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.3 pp over 4 years. Driven by net margin declining (10.5% → 9.2%), asset turnover declining (0.67x → 0.56x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.5% | 0.67 | 2.31 | 16.3% |
| FY2023 | ₹0Cr | ₹0Cr | 8.0% | 0.68 | 2.59 | 14.0% |
| FY2024 | ₹0Cr | ₹0Cr | 10.0% | 0.59 | 2.55 | 15.0% |
| FY2025 | ₹0Cr | ₹0Cr | 9.2% | 0.56 | 2.51 | 12.9% |
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.