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
8.6% = 12.3% × 0.55 × 1.26
Latest: FY2026
Profitability
Net Margin
12.3%
21.9% →12.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.72x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.26x
1.32x →1.26x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.2 pp over 5 years. Driven by net margin declining (21.9% → 12.3%), asset turnover declining (0.72x → 0.55x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 21.9% | 0.72 | 1.32 | 20.8% |
| FY2023 | ₹0Cr | ₹0Cr | 20.0% | 0.84 | 1.30 | 21.9% |
| FY2024 | ₹0Cr | ₹0Cr | 19.2% | 0.82 | 1.22 | 19.1% |
| FY2025 | ₹0Cr | ₹0Cr | 18.9% | 0.83 | 1.19 | 18.8% |
| FY2026 | ₹0Cr | ₹0Cr | 12.3% | 0.55 | 1.26 | 8.6% |
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.