DuPont Decomposition
Why does DIXON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
31.6% = 2.8% × 2.30 × 4.83
Latest: FY2025
Profitability
Net Margin
2.8%
2.1% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.30x
2.60x →2.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.83x
3.64x →4.83x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.7 pp over 3 years. Driven by asset turnover declining (2.60x → 2.30x), leverage rising (3.64x → 4.83x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.1% | 2.60 | 3.64 | 19.9% |
| FY2024 | ₹0Cr | ₹0Cr | 2.1% | 2.52 | 4.13 | 21.7% |
| FY2025 | ₹0Cr | ₹0Cr | 2.8% | 2.30 | 4.83 | 31.6% |
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.