DuPont Decomposition
Why does COFORGE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.8% = 6.7% × 0.96 × 1.50
Latest: FY2025
Profitability
Net Margin
6.7%
8.7% →6.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.96x
1.41x →0.96x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.84x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.8 pp over 3 years. Driven by net margin declining (8.7% → 6.7%), asset turnover declining (1.41x → 0.96x), leverage falling (1.84x → 1.50x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.7% | 1.41 | 1.84 | 22.5% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 1.48 | 1.68 | 22.3% |
| FY2025 | ₹0Cr | ₹0Cr | 6.7% | 0.96 | 1.50 | 9.8% |
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.