DuPont Decomposition
Why does DCMNVL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.7% = 0.9% × 1.28 × 2.24
Latest: FY2025
Profitability
Net Margin
0.9%
14.9% →0.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.28x
1.63x →1.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.24x
1.65x →2.24x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 37.3 pp over 4 years. Driven by net margin declining (14.9% → 0.9%), asset turnover declining (1.63x → 1.28x), leverage rising (1.65x → 2.24x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.9% | 1.63 | 1.65 | 40.0% |
| FY2023 | ₹0Cr | ₹0Cr | 1.6% | 1.19 | 1.98 | 3.8% |
| FY2024 | ₹0Cr | ₹-0Cr | -0.3% | 1.25 | 2.35 | -1.0% |
| FY2025 | ₹0Cr | ₹0Cr | 0.9% | 1.28 | 2.24 | 2.7% |
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.