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
14.5% = 7.5% × 1.01 × 1.93
Latest: FY2025
Profitability
Net Margin
7.5%
9.1% →7.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
0.27x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.93x
1.68x →1.93x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.3 pp over 3 years. Driven by net margin declining (9.1% → 7.5%), asset turnover improving (0.27x → 1.01x), leverage rising (1.68x → 1.93x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.1% | 0.27 | 1.68 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 8.0% | 0.27 | 1.64 | 3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 7.5% | 1.01 | 1.93 | 14.5% |
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.