DuPont Decomposition
Why does IFCI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.0% = 11.3% × 0.06 × 2.97
Latest: FY2026
Profitability
Net Margin
11.3%
-113.5% →11.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.06x
0.10x →0.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.97x
5.50x →2.97x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 64.5 pp over 5 years. Driven by net margin improving (-113.5% → 11.2%), leverage falling (5.50x → 2.97x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -113.5% | 0.10 | 5.50 | -62.5% |
| FY2023 | ₹0Cr | ₹-0Cr | -21.3% | 0.06 | 4.50 | -5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 7.2% | 0.08 | 4.17 | 2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 12.0% | 0.06 | 2.96 | 2.0% |
| FY2026 | ₹0Cr | ₹0Cr | 11.3% | 0.06 | 2.97 | 2.0% |
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.