DuPont Decomposition
Why does CHOICEIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.7% = 17.9% × 0.35 × 2.37
Latest: FY2025
Profitability
Net Margin
17.9%
22.3% →17.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.35x
0.12x →0.35x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.37x
2.32x →2.37x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.4 pp over 3 years. Driven by net margin declining (22.3% → 17.9%), asset turnover improving (0.12x → 0.35x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 22.3% | 0.12 | 2.32 | 6.3% |
| FY2024 | ₹0Cr | ₹0Cr | 1.6% | 0.01 | 1.13 | 0.0% |
| FY2025 | ₹0Cr | ₹0Cr | 17.9% | 0.35 | 2.37 | 14.7% |
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.