DuPont Decomposition
Why does FSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.4% = 7.0% × 1.03 × 2.13
Latest: FY2026
Profitability
Net Margin
7.0%
9.2% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.03x
1.03x →1.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.13x
1.88x →2.13x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.3 pp over 5 years. Driven by net margin declining (9.2% → 7.0%), leverage rising (1.88x → 2.13x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.2% | 1.03 | 1.88 | 17.7% |
| FY2023 | ₹0Cr | ₹0Cr | 8.6% | 1.06 | 1.68 | 15.3% |
| FY2024 | ₹0Cr | ₹0Cr | 8.1% | 1.04 | 1.64 | 13.9% |
| FY2025 | ₹0Cr | ₹0Cr | 7.5% | 1.01 | 1.93 | 14.5% |
| FY2026 | ₹0Cr | ₹0Cr | 7.0% | 1.03 | 2.13 | 15.4% |
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.