DuPont Decomposition
Why does IDEAFORGE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-2.8% = -7.5% × 0.28 × 1.33
Latest: FY2026
Profitability
Net Margin
-7.5%
27.6% →-7.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.28x
0.72x →0.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
1.36x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 29.8 pp over 5 years. Driven by net margin declining (27.6% → -7.5%), asset turnover declining (0.72x → 0.28x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 27.6% | 0.72 | 1.36 | 26.9% |
| FY2023 | ₹0Cr | ₹0Cr | 19.0% | 0.35 | 1.50 | 9.8% |
| FY2024 | ₹0Cr | ₹0Cr | 15.0% | 0.41 | 1.12 | 6.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -38.6% | 0.24 | 1.10 | -10.2% |
| FY2026 | ₹0Cr | ₹-0Cr | -7.5% | 0.28 | 1.33 | -2.8% |
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.