DuPont Decomposition
Why does DIFFNKG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.7% = 10.8% × 0.75 × 1.20
Latest: FY2025
Profitability
Net Margin
10.8%
8.4% →10.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.75x
1.07x →0.75x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.20x
1.57x →1.20x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.4 pp over 4 years. Driven by net margin improving (8.4% → 10.8%), asset turnover declining (1.07x → 0.75x), leverage falling (1.57x → 1.20x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.4% | 1.07 | 1.57 | 14.1% |
| FY2023 | ₹0Cr | ₹0Cr | 8.8% | 1.10 | 1.62 | 15.6% |
| FY2024 | ₹0Cr | ₹0Cr | 11.1% | 1.00 | 1.44 | 16.1% |
| FY2025 | ₹0Cr | ₹0Cr | 10.8% | 0.75 | 1.20 | 9.7% |
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.