DuPont Decomposition
Why does EMMBI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.5% = 1.6% × 0.98 × 2.21
Latest: FY2025
Profitability
Net Margin
1.6%
4.4% →1.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.98x
1.23x →0.98x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.21x
2.31x →2.21x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.9 pp over 4 years. Driven by net margin declining (4.4% → 1.6%), asset turnover declining (1.23x → 0.98x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.4% | 1.23 | 2.31 | 12.4% |
| FY2023 | ₹0Cr | ₹0Cr | 2.2% | 1.01 | 2.28 | 5.1% |
| FY2024 | ₹0Cr | ₹0Cr | 2.6% | 0.97 | 2.28 | 5.8% |
| FY2025 | ₹0Cr | ₹0Cr | 1.6% | 0.98 | 2.21 | 3.5% |
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.