DuPont Decomposition
Why does ELGIEQUIP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.8% = 10.0% × 1.15 × 1.63
Latest: FY2025
Profitability
Net Margin
10.0%
7.1% →10.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.15x
1.28x →1.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.63x
1.90x →1.63x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.5 pp over 4 years. Driven by net margin improving (7.1% → 10.0%), asset turnover declining (1.28x → 1.15x), leverage falling (1.90x → 1.63x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.1% | 1.28 | 1.90 | 17.3% |
| FY2023 | ₹0Cr | ₹0Cr | 12.3% | 1.21 | 1.82 | 27.0% |
| FY2024 | ₹0Cr | ₹0Cr | 9.8% | 1.14 | 1.75 | 19.4% |
| FY2025 | ₹0Cr | ₹0Cr | 10.0% | 1.15 | 1.63 | 18.8% |
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.