DuPont Decomposition
Why does DEEPAKFERT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.9% = 11.1% × 0.64 × 2.10
Latest: FY2025
Profitability
Net Margin
11.1%
13.9% →11.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.76x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.10x
2.25x →2.10x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.9 pp over 3 years. Driven by net margin declining (13.9% → 11.1%), asset turnover declining (0.76x → 0.64x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.9% | 0.76 | 2.25 | 23.9% |
| FY2024 | ₹0Cr | ₹0Cr | 6.4% | 0.60 | 2.19 | 8.4% |
| FY2025 | ₹0Cr | ₹0Cr | 11.1% | 0.64 | 2.10 | 14.9% |
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.