DuPont Decomposition
Why does DCMSHRIRAM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.1% = 6.3% × 0.95 × 1.83
Latest: FY2026
Profitability
Net Margin
6.3%
11.2% →6.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
1.02x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.83x
1.70x →1.83x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.3 pp over 5 years. Driven by net margin declining (11.2% → 6.3%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.2% | 1.02 | 1.70 | 19.4% |
| FY2023 | ₹0Cr | ₹0Cr | 7.9% | 1.07 | 1.73 | 14.7% |
| FY2024 | ₹0Cr | ₹0Cr | 4.1% | 0.94 | 1.77 | 6.9% |
| FY2025 | ₹0Cr | ₹0Cr | 5.0% | 0.94 | 1.82 | 8.6% |
| FY2026 | ₹0Cr | ₹0Cr | 6.3% | 0.95 | 1.83 | 11.1% |
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.