DuPont Decomposition
Why does DWARKESH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.7% = 2.2% × 1.08 × 1.57
Latest: FY2026
Profitability
Net Margin
2.2%
7.8% →2.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.08x
1.39x →1.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.57x
2.11x →1.57x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 19.3 pp over 5 years. Driven by net margin declining (7.8% → 2.2%), asset turnover declining (1.39x → 1.08x), leverage falling (2.11x → 1.57x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.8% | 1.39 | 2.11 | 23.1% |
| FY2023 | ₹0Cr | ₹0Cr | 5.0% | 1.63 | 1.73 | 14.2% |
| FY2024 | ₹0Cr | ₹0Cr | 4.9% | 1.21 | 1.72 | 10.2% |
| FY2025 | ₹0Cr | ₹0Cr | 1.7% | 0.93 | 1.81 | 2.9% |
| FY2026 | ₹0Cr | ₹0Cr | 2.2% | 1.08 | 1.57 | 3.7% |
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.