DuPont Decomposition
Why does CARRARO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
23.1% = 5.8% × 1.78 × 2.25
Latest: FY2026
Profitability
Net Margin
5.8%
1.5% →5.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.78x
1.47x →1.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.25x
3.46x →2.25x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 15.5 pp over 5 years. Driven by net margin improving (1.5% → 5.8%), asset turnover improving (1.47x → 1.78x), leverage falling (3.46x → 2.25x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.5% | 1.47 | 3.46 | 7.7% |
| FY2023 | ₹0Cr | ₹0Cr | 2.8% | 1.59 | 3.18 | 14.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.5% | 1.66 | 2.90 | 16.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 1.63 | 2.42 | 19.2% |
| FY2026 | ₹0Cr | ₹0Cr | 5.8% | 1.78 | 2.25 | 23.1% |
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.