DuPont Decomposition
Why does ELECON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.8% = 14.4% × 0.73 × 1.40
Latest: FY2026
Profitability
Net Margin
14.4%
15.8% →14.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
0.87x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
1.35x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.8 pp over 4 years. Driven by net margin declining (15.8% → 14.4%), asset turnover declining (0.87x → 0.73x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.8% | 0.87 | 1.35 | 18.6% |
| FY2024 | ₹0Cr | ₹0Cr | 18.6% | 0.90 | 1.32 | 22.2% |
| FY2025 | ₹0Cr | ₹0Cr | 18.6% | 0.82 | 1.37 | 20.8% |
| FY2026 | ₹0Cr | ₹0Cr | 14.4% | 0.73 | 1.40 | 14.8% |
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.