DuPont Decomposition
Why does DIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.8% = 8.2% × 0.41 × 1.10
Latest: FY2024
Profitability
Net Margin
8.2%
6.9% →8.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.41x
1.07x →0.41x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.31x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.9 pp over 3 years. Driven by net margin improving (6.9% → 8.2%), asset turnover declining (1.07x → 0.41x), leverage falling (1.31x → 1.10x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.9% | 1.07 | 1.31 | 9.7% |
| FY2023 | ₹0Cr | ₹0Cr | 8.8% | 1.36 | 1.30 | 15.6% |
| FY2024 | ₹0Cr | ₹0Cr | 8.2% | 0.41 | 1.10 | 3.8% |
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.