DuPont Decomposition
Why does EFCIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.4% = 17.2% × 0.39 × 2.92
Latest: FY2025
Profitability
Net Margin
17.2%
4.2% →17.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.39x
0.22x →0.39x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.92x
6.36x →2.92x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.6 pp over 3 years. Driven by net margin improving (4.2% → 17.2%), asset turnover improving (0.22x → 0.39x), leverage falling (6.36x → 2.92x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.2% | 0.22 | 6.36 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 13.8% | 0.43 | 2.27 | 13.4% |
| FY2025 | ₹0Cr | ₹0Cr | 17.2% | 0.39 | 2.92 | 19.4% |
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.