DuPont Decomposition
Why does DOMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.7% = 10.6% × 1.25 × 1.40
Latest: FY2025
Profitability
Net Margin
10.6%
2.1% →10.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.25x
1.37x →1.25x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
1.93x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.1 pp over 4 years. Driven by net margin improving (2.1% → 10.6%), asset turnover declining (1.37x → 1.25x), leverage falling (1.93x → 1.40x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.1% | 1.37 | 1.93 | 5.6% |
| FY2023 | ₹0Cr | ₹0Cr | 7.9% | 1.89 | 1.80 | 27.0% |
| FY2024 | ₹0Cr | ₹0Cr | 10.4% | 1.29 | 1.46 | 19.6% |
| FY2025 | ₹0Cr | ₹0Cr | 10.6% | 1.25 | 1.40 | 18.7% |
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.