DuPont Decomposition
Why does FEDERALBNK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.8% = 26.3% × 0.04 × 10.04
Latest: FY2026
Profitability
Net Margin
26.3%
23.1% →26.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.04x
0.04x →0.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
10.04x
11.75x →10.04x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~11%. Driven by net margin improving (23.1% → 26.3%), leverage falling (11.75x → 10.04x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 23.1% | 0.04 | 11.75 | 10.2% |
| FY2023 | ₹0Cr | ₹0Cr | 30.8% | 0.04 | 12.11 | 14.3% |
| FY2024 | ₹0Cr | ₹0Cr | 32.0% | 0.04 | 10.56 | 12.9% |
| FY2025 | ₹0Cr | ₹0Cr | 28.9% | 0.04 | 10.43 | 12.0% |
| FY2026 | ₹0Cr | ₹0Cr | 26.3% | 0.04 | 10.04 | 10.8% |
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.