DuPont Decomposition
Why does AZAD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.3% = 19.7% × 0.24 × 1.34
Latest: FY2025
Profitability
Net Margin
19.7%
15.9% →19.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.24x
0.46x →0.24x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
3.37x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 18.3 pp over 4 years. Driven by net margin improving (15.9% → 19.7%), asset turnover declining (0.46x → 0.24x), leverage falling (3.37x → 1.34x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.9% | 0.46 | 3.37 | 24.6% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 0.41 | 2.89 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 16.1% | 0.12 | 1.24 | 2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 19.7% | 0.24 | 1.34 | 6.3% |
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.