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
19.2% = 4.9% × 1.63 × 2.42
Latest: FY2025
Profitability
Net Margin
4.9%
1.5% →4.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.63x
1.47x →1.63x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.42x
3.46x →2.42x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.6 pp over 4 years. Driven by net margin improving (1.5% → 4.9%), asset turnover improving (1.47x → 1.63x), leverage falling (3.46x → 2.42x).
Historical Decomposition
Last 4 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 | 14.3% |
| FY2024 | ₹0Cr | ₹0Cr | 3.5% | 1.66 | 2.90 | 16.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 1.63 | 2.42 | 19.2% |
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.