DuPont Decomposition
Why does ECLERX earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
23.4% = 16.1% × 1.07 × 1.36
Latest: FY2025
Profitability
Net Margin
16.1%
19.1% →16.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.07x
0.30x →1.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.36x
1.33x →1.36x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 15.7 pp over 3 years. Driven by net margin declining (19.1% → 16.1%), asset turnover improving (0.30x → 1.07x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 19.1% | 0.30 | 1.33 | 7.7% |
| FY2024 | ₹0Cr | ₹0Cr | 16.9% | 0.26 | 1.30 | 5.8% |
| FY2025 | ₹0Cr | ₹0Cr | 16.1% | 1.07 | 1.36 | 23.4% |
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.