DuPont Decomposition
Why does ERIS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.9% = 19.9% × 0.42 × 1.89
Latest: FY2026
Profitability
Net Margin
19.9%
30.6% →19.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.42x
0.58x →0.42x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.89x
1.19x →1.89x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.4 pp over 5 years. Driven by net margin declining (30.6% → 19.9%), asset turnover declining (0.58x → 0.42x), leverage rising (1.19x → 1.89x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 30.6% | 0.58 | 1.19 | 21.3% |
| FY2023 | ₹0Cr | ₹0Cr | 23.0% | 0.45 | 1.67 | 17.4% |
| FY2024 | ₹0Cr | ₹0Cr | 19.7% | 0.28 | 2.72 | 15.2% |
| FY2025 | ₹0Cr | ₹0Cr | 12.2% | 0.41 | 2.46 | 12.3% |
| FY2026 | ₹0Cr | ₹0Cr | 19.9% | 0.42 | 1.89 | 15.9% |
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.