DuPont Decomposition
Why does DRCSYSTEMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
23.3% = 23.1% × 0.66 × 1.54
Latest: FY2025
Profitability
Net Margin
23.1%
3.6% →23.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.78x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.54x
3.68x →1.54x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.0 pp over 4 years. Driven by net margin improving (3.6% → 23.1%), asset turnover declining (0.78x → 0.66x), leverage falling (3.68x → 1.54x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.6% | 0.78 | 3.68 | 10.4% |
| FY2023 | ₹0Cr | ₹0Cr | 26.1% | 0.66 | 1.14 | 19.5% |
| FY2024 | ₹0Cr | ₹0Cr | 24.4% | 0.61 | 1.64 | 24.4% |
| FY2025 | ₹0Cr | ₹0Cr | 23.1% | 0.66 | 1.54 | 23.3% |
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.