DuPont Decomposition
Why does ESAFSFB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-26.8% = -20.7% × 0.09 × 13.94
Latest: FY2025
Profitability
Net Margin
-20.7%
4.0% →-20.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.09x
0.08x →0.09x
Revenue per ₹ of assets
Leverage
Equity Multiplier
13.94x
12.54x →13.94x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 30.6 pp over 4 years. Driven by net margin declining (4.0% → -20.7%), leverage rising (12.54x → 13.94x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.0% | 0.08 | 12.54 | 3.9% |
| FY2023 | ₹0Cr | ₹0Cr | 14.7% | 0.10 | 11.79 | 17.6% |
| FY2024 | ₹0Cr | ₹0Cr | 15.1% | 0.11 | 10.47 | 17.1% |
| FY2025 | ₹0Cr | ₹-0Cr | -20.7% | 0.09 | 13.94 | -26.8% |
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.