DuPont Decomposition
Why does DENTA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.9% = 26.0% × 0.47 × 1.05
Latest: FY2025
Profitability
Net Margin
26.0%
32.2% →26.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.47x
1.96x →0.47x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.05x
1.11x →1.05x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 57.5 pp over 4 years. Driven by net margin declining (32.2% → 26.0%), asset turnover declining (1.96x → 0.47x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 32.2% | 1.96 | 1.11 | 70.4% |
| FY2023 | ₹0Cr | ₹0Cr | 28.8% | 1.41 | 1.18 | 47.9% |
| FY2024 | ₹0Cr | ₹0Cr | 25.3% | 1.09 | 1.34 | 36.8% |
| FY2025 | ₹0Cr | ₹0Cr | 26.0% | 0.47 | 1.05 | 12.9% |
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.