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
20.8% = 17.2% × 0.39 × 3.13
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
3.13x
6.52x →3.13x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.8 pp over 3 years. Driven by net margin improving (4.2% → 17.2%), asset turnover improving (0.22x → 0.39x), leverage falling (6.52x → 3.13x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.2% | 0.22 | 6.52 | 6.0% |
| FY2024 | ₹0Cr | ₹0Cr | 13.8% | 0.43 | 2.30 | 13.6% |
| FY2025 | ₹0Cr | ₹0Cr | 17.2% | 0.39 | 3.13 | 20.8% |
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.