DuPont Decomposition
Why does DIGIDRIVE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.9% = 15.9% × 0.16 × 1.14
Latest: FY2025
Profitability
Net Margin
15.9%
10.8% →15.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.16x
0.29x →0.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.14x
1.08x →1.14x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~3%. Driven by net margin improving (10.8% → 15.9%), asset turnover declining (0.29x → 0.16x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 10.8% | 0.29 | 1.08 | 3.4% |
| FY2024 | ₹0Cr | ₹0Cr | 8.5% | 0.19 | 1.11 | 1.8% |
| FY2025 | ₹0Cr | ₹0Cr | 15.9% | 0.16 | 1.14 | 2.9% |
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.