DuPont Decomposition
Why does CARERATING earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.8% = 34.1% × 0.42 × 1.17
Latest: FY2025
Profitability
Net Margin
34.1%
29.9% →34.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.42x
0.36x →0.42x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.17x
1.15x →1.17x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.4 pp over 3 years. Driven by net margin improving (29.9% → 34.1%).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 29.9% | 0.36 | 1.15 | 12.4% |
| FY2024 | ₹0Cr | ₹0Cr | 30.3% | 0.39 | 1.17 | 14.0% |
| FY2025 | ₹0Cr | ₹0Cr | 34.1% | 0.42 | 1.17 | 16.8% |
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.