DuPont Decomposition
Why does DCMSRIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.3% = 5.0% × 0.88 × 2.57
Latest: FY2025
Profitability
Net Margin
5.0%
3.2% →5.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.88x
1.17x →0.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.57x
2.65x →2.57x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.4 pp over 4 years. Driven by net margin improving (3.2% → 5.0%), asset turnover declining (1.17x → 0.88x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.2% | 1.17 | 2.65 | 9.9% |
| FY2023 | ₹0Cr | ₹0Cr | 2.6% | 1.19 | 2.72 | 8.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.6% | 0.94 | 2.70 | 14.2% |
| FY2025 | ₹0Cr | ₹0Cr | 5.0% | 0.88 | 2.57 | 11.3% |
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.