DuPont Decomposition
Why does EMMVEE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
68.7% = 15.9% × 0.59 × 7.29
Latest: FY2025
Profitability
Net Margin
15.9%
1.5% →15.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.59x
0.72x →0.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
7.29x
5.98x →7.29x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 62.4 pp over 3 years. Driven by net margin improving (1.5% → 15.9%), asset turnover declining (0.72x → 0.59x), leverage rising (5.98x → 7.29x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.5% | 0.72 | 5.98 | 6.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.1% | 0.43 | 12.98 | 17.1% |
| FY2025 | ₹0Cr | ₹0Cr | 15.9% | 0.59 | 7.29 | 68.7% |
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.