DuPont Decomposition
Why does DENORA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.4% = 2.5% × 0.48 × 1.18
Latest: FY2025
Profitability
Net Margin
2.5%
21.0% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.48x
0.79x →0.48x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.18x
1.14x →1.18x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 17.5 pp over 4 years. Driven by net margin declining (21.0% → 2.5%), asset turnover declining (0.79x → 0.48x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 21.0% | 0.79 | 1.14 | 18.9% |
| FY2023 | ₹0Cr | ₹0Cr | 27.9% | 0.63 | 1.14 | 19.9% |
| FY2024 | ₹0Cr | ₹0Cr | 25.8% | 0.58 | 1.06 | 15.9% |
| FY2025 | ₹0Cr | ₹0Cr | 2.5% | 0.48 | 1.18 | 1.4% |
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.