DuPont Decomposition

Why does EQUITASBNK earn its ROE?

Breaking down Return on Equity into profitability, efficiency, and leverage.

ROE = Net Margin × Asset Turnover × Equity Multiplier

2.4% = 3.6% × 0.08 × 8.70

Latest: FY2025

Profitability

Net Margin

3.6%

18.8% →3.6%

How much profit per ₹ of revenue

Efficiency

Asset Turnover

0.08x

0.09x →0.08x

Revenue per ₹ of assets

Leverage

Equity Multiplier

8.70x

6.78x →8.70x

Assets funded by equity vs debt

Trend Analysis

ROE declined by 8.7 pp over 2 years. Driven by net margin declining (18.8% → 3.6%), leverage rising (6.78x → 8.70x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.

Historical Decomposition

Last 2 years

Year	Revenue	PAT	Net Margin	Asset TO	Leverage	ROE
FY2023	₹0Cr	₹0Cr	18.8%	0.09	6.78	11.1%
FY2025	₹0Cr	₹0Cr	3.6%	0.08	8.70	2.4%

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)

See DCF fair value for EQUITASBNK

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DuPont decomposition from audited annual financials. Factual analysis, not investment advice.