DuPont Decomposition
Why does DONEAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.6% = 3.5% × 1.15 × 3.36
Latest: FY2025
Profitability
Net Margin
3.5%
4.0% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.15x
0.93x →1.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.36x
4.50x →3.36x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.2 pp over 4 years. Driven by asset turnover improving (0.93x → 1.15x), leverage falling (4.50x → 3.36x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.0% | 0.93 | 4.50 | 16.8% |
| FY2023 | ₹0Cr | ₹0Cr | 4.4% | 1.26 | 3.82 | 21.2% |
| FY2024 | ₹0Cr | ₹0Cr | 4.4% | 1.12 | 3.47 | 17.0% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 1.15 | 3.36 | 13.6% |
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.