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
14.7% = 20.3% × 0.65 × 1.10
Latest: FY2025
Profitability
Net Margin
20.3%
18.9% →20.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.65x
0.33x →0.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.21x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.2 pp over 3 years. Driven by net margin improving (18.9% → 20.3%), asset turnover improving (0.33x → 0.65x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 18.9% | 0.33 | 1.21 | 7.5% |
| FY2024 | ₹0Cr | ₹0Cr | 19.9% | 0.28 | 1.23 | 6.8% |
| FY2025 | ₹0Cr | ₹0Cr | 20.3% | 0.65 | 1.10 | 14.7% |
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.