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
1.1% = 12.0% × 0.06 × 1.71
Latest: FY2025
Profitability
Net Margin
12.0%
-58.3% →12.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.06x
0.02x →0.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.71x
2.54x →1.71x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.8 pp over 3 years. Driven by net margin improving (-58.3% → 12.0%), leverage falling (2.54x → 1.71x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -58.3% | 0.02 | 2.54 | -3.6% |
| FY2024 | ₹0Cr | ₹0Cr | 26.0% | 0.03 | 2.46 | 2.0% |
| FY2025 | ₹0Cr | ₹0Cr | 12.0% | 0.06 | 1.71 | 1.1% |
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.