DuPont Decomposition
Why does ETERNAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.7% = 2.6% × 0.57 × 1.18
Latest: FY2025
Profitability
Net Margin
2.6%
-9.1% →2.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.57x
0.10x →0.57x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.18x
1.11x →1.18x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.7 pp over 3 years. Driven by net margin improving (-9.1% → 2.6%), asset turnover improving (0.10x → 0.57x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -9.1% | 0.10 | 1.11 | -1.0% |
| FY2024 | ₹0Cr | ₹0Cr | 4.9% | 0.15 | 1.14 | 0.9% |
| FY2025 | ₹0Cr | ₹0Cr | 2.6% | 0.57 | 1.18 | 1.7% |
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.