DuPont Decomposition
Why does EIEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.7% = 16.7% × 0.70 × 1.51
Latest: FY2025
Profitability
Net Margin
16.7%
15.5% →16.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.70x
1.51x →0.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.51x
2.07x →1.51x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 30.5 pp over 4 years. Driven by net margin improving (15.5% → 16.7%), asset turnover declining (1.51x → 0.70x), leverage falling (2.07x → 1.51x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.5% | 1.51 | 2.07 | 48.2% |
| FY2023 | ₹0Cr | ₹0Cr | 16.3% | 0.97 | 2.74 | 43.3% |
| FY2024 | ₹0Cr | ₹0Cr | 14.9% | 0.96 | 2.62 | 37.3% |
| FY2025 | ₹0Cr | ₹0Cr | 16.7% | 0.70 | 1.51 | 17.7% |
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.