DuPont Decomposition
Why does DECCANCE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.0% = 1.4% × 0.32 × 2.25
Latest: FY2025
Profitability
Net Margin
1.4%
6.3% →1.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.32x
0.68x →0.32x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.25x
1.68x →2.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.1 pp over 3 years. Driven by net margin declining (6.3% → 1.4%), asset turnover declining (0.68x → 0.32x), leverage rising (1.68x → 2.25x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 0.68 | 1.68 | 7.2% |
| FY2024 | ₹0Cr | ₹0Cr | 4.7% | 0.55 | 2.01 | 5.2% |
| FY2025 | ₹0Cr | ₹0Cr | 1.4% | 0.32 | 2.25 | 1.0% |
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.