DuPont Decomposition
Why does DCW earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.9% = 1.5% × 0.91 × 2.11
Latest: FY2025
Profitability
Net Margin
1.5%
6.0% →1.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.29x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.11x
2.01x →2.11x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~3%. Driven by net margin declining (6.0% → 1.5%), asset turnover improving (0.29x → 0.91x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.0% | 0.29 | 2.01 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 2.5% | 0.30 | 2.02 | 1.5% |
| FY2025 | ₹0Cr | ₹0Cr | 1.5% | 0.91 | 2.11 | 2.9% |
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.