DuPont Decomposition
Why does DMCC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.5% = 5.1% × 1.12 × 1.67
Latest: FY2025
Profitability
Net Margin
5.1%
7.1% →5.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.12x
0.24x →1.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.67x
2.02x →1.67x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.1 pp over 3 years. Driven by net margin declining (7.1% → 5.1%), asset turnover improving (0.24x → 1.12x), leverage falling (2.02x → 1.67x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.1% | 0.24 | 2.02 | 3.4% |
| FY2024 | ₹0Cr | ₹0Cr | 6.9% | 0.22 | 1.80 | 2.8% |
| FY2025 | ₹0Cr | ₹0Cr | 5.1% | 1.12 | 1.67 | 9.5% |
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.