DuPont Decomposition
Why does EMSLIMITED earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.8% = 19.0% × 0.83 × 1.19
Latest: FY2025
Profitability
Net Margin
19.0%
21.9% →19.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
0.72x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.19x
1.32x →1.19x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.9 pp over 4 years. Driven by net margin declining (21.9% → 19.0%), asset turnover improving (0.72x → 0.83x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 21.9% | 0.72 | 1.32 | 20.7% |
| FY2023 | ₹0Cr | ₹0Cr | 20.0% | 0.84 | 1.30 | 21.9% |
| FY2024 | ₹0Cr | ₹0Cr | 19.3% | 0.25 | 1.22 | 5.9% |
| FY2025 | ₹0Cr | ₹0Cr | 19.0% | 0.83 | 1.19 | 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.