DuPont Decomposition
Why does FAIRCHEMOR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.3% = 4.1% × 1.33 × 1.33
Latest: FY2025
Profitability
Net Margin
4.1%
7.8% →4.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.33x
0.44x →1.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
1.32x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.7 pp over 3 years. Driven by net margin declining (7.8% → 4.1%), asset turnover improving (0.44x → 1.33x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 0.44 | 1.32 | 4.6% |
| FY2024 | ₹0Cr | ₹0Cr | 7.3% | 0.48 | 1.15 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 4.1% | 1.33 | 1.33 | 7.3% |
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.