DuPont Decomposition
Why does ESTER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.8% = 1.1% × 0.81 × 2.04
Latest: FY2025
Profitability
Net Margin
1.1%
-6.0% →1.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
0.17x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.04x
2.31x →2.04x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.2 pp over 3 years. Driven by net margin improving (-6.0% → 1.1%), asset turnover improving (0.17x → 0.81x), leverage falling (2.31x → 2.04x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -6.0% | 0.17 | 2.31 | -2.4% |
| FY2024 | ₹0Cr | ₹-0Cr | -8.6% | 0.17 | 2.29 | -3.3% |
| FY2025 | ₹0Cr | ₹0Cr | 1.1% | 0.81 | 2.04 | 1.8% |
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.