DuPont Decomposition
Why does FEDFINA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.8% = 11.4% × 0.15 × 5.20
Latest: FY2025
Profitability
Net Margin
11.4%
12.1% →11.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.15x
0.13x →0.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.20x
5.68x →5.20x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~9%. Driven by leverage falling (5.68x → 5.20x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.1% | 0.13 | 5.68 | 9.0% |
| FY2023 | ₹0Cr | ₹0Cr | 15.7% | 0.13 | 6.69 | 13.3% |
| FY2024 | ₹0Cr | ₹0Cr | 16.6% | 0.04 | 4.93 | 3.0% |
| FY2025 | ₹0Cr | ₹0Cr | 11.4% | 0.15 | 5.20 | 8.8% |
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.