DuPont Decomposition
Why does EMIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.4% = 2.4% × 1.78 × 2.41
Latest: FY2025
Profitability
Net Margin
2.4%
2.4% →2.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.78x
2.38x →1.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.41x
3.06x →2.41x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.0 pp over 4 years. Driven by asset turnover declining (2.38x → 1.78x), leverage falling (3.06x → 2.41x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.4% | 2.38 | 3.06 | 17.4% |
| FY2023 | ₹0Cr | ₹0Cr | 2.4% | 1.89 | 2.27 | 10.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.1% | 1.93 | 2.23 | 13.4% |
| FY2025 | ₹0Cr | ₹0Cr | 2.4% | 1.78 | 2.41 | 10.4% |
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.