DuPont Decomposition
Why does EICHERMOT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.2% = 25.5% × 0.68 × 1.28
Latest: FY2025
Profitability
Net Margin
25.5%
23.8% →25.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
0.20x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.28x
1.28x →1.28x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.2 pp over 3 years. Driven by net margin improving (23.8% → 25.5%), asset turnover improving (0.20x → 0.68x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 23.8% | 0.20 | 1.28 | 6.0% |
| FY2024 | ₹0Cr | ₹0Cr | 25.1% | 0.18 | 1.28 | 5.9% |
| FY2025 | ₹0Cr | ₹0Cr | 25.5% | 0.68 | 1.28 | 22.2% |
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.