DuPont Decomposition
Why does DCI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.7% = 2.9% × 1.98 × 3.46
Latest: FY2026
Profitability
Net Margin
2.9%
1.7% →2.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.98x
2.29x →1.98x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.46x
4.53x →3.46x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.9 pp over 5 years. Driven by net margin improving (1.7% → 2.9%), asset turnover declining (2.29x → 1.98x), leverage falling (4.53x → 3.46x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.7% | 2.29 | 4.53 | 17.8% |
| FY2023 | ₹0Cr | ₹0Cr | 2.0% | 2.57 | 4.74 | 24.0% |
| FY2024 | ₹0Cr | ₹0Cr | 2.5% | 2.21 | 4.11 | 22.9% |
| FY2025 | ₹0Cr | ₹0Cr | 2.6% | 2.26 | 3.41 | 20.1% |
| FY2026 | ₹0Cr | ₹0Cr | 2.9% | 1.98 | 3.46 | 19.7% |
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.