DuPont Decomposition
Why does EDELWEISS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.0% = 7.0% × 0.14 × 9.41
Latest: FY2025
Profitability
Net Margin
7.0%
4.9% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.14x
0.09x →0.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.41x
6.62x →9.41x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.1 pp over 4 years. Driven by net margin improving (4.9% → 7.0%), leverage rising (6.62x → 9.41x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.9% | 0.09 | 6.62 | 2.9% |
| FY2023 | ₹0Cr | ₹0Cr | 7.1% | 0.11 | 6.53 | 5.1% |
| FY2024 | ₹0Cr | ₹0Cr | 7.5% | 0.13 | 9.01 | 8.8% |
| FY2025 | ₹0Cr | ₹0Cr | 7.0% | 0.14 | 9.41 | 9.0% |
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.