DuPont Decomposition
Why does AXITA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.5% = 0.1% × 8.42 × 1.23
Latest: FY2025
Profitability
Net Margin
0.1%
1.9% →0.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
8.42x
7.33x →8.42x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.23x
3.00x →1.23x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 41.0 pp over 4 years. Driven by net margin declining (1.9% → 0.1%), asset turnover improving (7.33x → 8.42x), leverage falling (3.00x → 1.23x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.9% | 7.33 | 3.00 | 42.5% |
| FY2023 | ₹0Cr | ₹0Cr | 3.1% | 6.72 | 1.54 | 32.5% |
| FY2024 | ₹0Cr | ₹0Cr | 1.9% | 11.19 | 1.52 | 31.5% |
| FY2025 | ₹0Cr | ₹0Cr | 0.1% | 8.42 | 1.23 | 1.5% |
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.