DuPont Decomposition
Why does DIVGIITTS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.1% = 11.3% × 0.33 × 1.11
Latest: FY2025
Profitability
Net Margin
11.3%
20.2% →11.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.33x
0.56x →0.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.11x
1.19x →1.11x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.5 pp over 4 years. Driven by net margin declining (20.2% → 11.3%), asset turnover declining (0.56x → 0.33x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 20.2% | 0.56 | 1.19 | 13.6% |
| FY2023 | ₹0Cr | ₹0Cr | 18.3% | 0.11 | 1.16 | 2.4% |
| FY2024 | ₹0Cr | ₹0Cr | 14.2% | 0.10 | 1.11 | 1.6% |
| FY2025 | ₹0Cr | ₹0Cr | 11.3% | 0.33 | 1.11 | 4.1% |
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.