DuPont Decomposition
Why does FINOPB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.4% = 13.7% × 0.16 × 5.63
Latest: FY2025
Profitability
Net Margin
13.7%
14.6% →13.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.16x
0.18x →0.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.63x
4.46x →5.63x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~12%. Driven by leverage rising (4.46x → 5.63x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.6% | 0.18 | 4.46 | 11.8% |
| FY2025 | ₹0Cr | ₹0Cr | 13.7% | 0.16 | 5.63 | 12.4% |
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.