DuPont Decomposition
Why does DAMODARIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.8% = 1.3% × 1.20 × 2.45
Latest: FY2025
Profitability
Net Margin
1.3%
0.1% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.20x
1.52x →1.20x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.45x
3.89x →2.45x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.1 pp over 3 years. Driven by net margin improving (0.1% → 1.3%), asset turnover declining (1.52x → 1.20x), leverage falling (3.89x → 2.45x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 0.1% | 1.52 | 3.89 | 0.7% |
| FY2024 | ₹0Cr | ₹0Cr | 0.7% | 1.71 | 3.49 | 4.3% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 1.20 | 2.45 | 3.8% |
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.