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
11.7% = 15.6% × 0.13 × 5.77
Latest: FY2026
Profitability
Net Margin
15.6%
12.1% →15.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.13x
0.13x →0.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.77x
5.68x →5.77x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.8 pp over 5 years. Driven by net margin improving (12.1% → 15.6%). 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 | 12.1% | 0.13 | 5.68 | 9.0% |
| FY2023 | ₹0Cr | ₹0Cr | 15.7% | 0.13 | 6.69 | 13.3% |
| FY2024 | ₹0Cr | ₹0Cr | 16.1% | 0.14 | 4.93 | 10.8% |
| FY2025 | ₹0Cr | ₹0Cr | 11.1% | 0.15 | 5.20 | 8.8% |
| FY2026 | ₹0Cr | ₹0Cr | 15.6% | 0.13 | 5.77 | 11.7% |
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.