DuPont Decomposition
Why does FCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.3% = 14.1% × 0.67 × 1.31
Latest: FY2026
Profitability
Net Margin
14.1%
15.1% →14.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.67x
1.08x →0.67x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.31x
1.30x →1.31x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.7 pp over 5 years. Driven by asset turnover declining (1.08x → 0.67x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.1% | 1.08 | 1.30 | 21.1% |
| FY2023 | ₹0Cr | ₹0Cr | 17.1% | 1.22 | 1.21 | 25.3% |
| FY2024 | ₹0Cr | ₹0Cr | 21.1% | 1.04 | 1.23 | 26.8% |
| FY2025 | ₹0Cr | ₹0Cr | 20.3% | 0.65 | 1.11 | 14.8% |
| FY2026 | ₹0Cr | ₹0Cr | 14.1% | 0.67 | 1.31 | 12.3% |
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.