DuPont Decomposition
Why does ICIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.8% = 6.5% × 0.90 × 1.87
Latest: FY2025
Profitability
Net Margin
6.5%
11.7% →6.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.90x
0.26x →0.90x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.87x
1.71x →1.87x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.5 pp over 3 years. Driven by net margin declining (11.7% → 6.5%), asset turnover improving (0.26x → 0.90x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.7% | 0.26 | 1.71 | 5.3% |
| FY2024 | ₹0Cr | ₹0Cr | 8.4% | 0.31 | 1.71 | 4.4% |
| FY2025 | ₹0Cr | ₹0Cr | 6.5% | 0.90 | 1.87 | 10.8% |
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.