DuPont Decomposition
Why does IGCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.2% = 5.1% × 1.02 × 2.34
Latest: FY2024
Profitability
Net Margin
5.1%
5.4% →5.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.02x
1.18x →1.02x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.34x
2.29x →2.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.4 pp over 3 years. Driven by asset turnover declining (1.18x → 1.02x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.4% | 1.18 | 2.29 | 14.6% |
| FY2023 | ₹0Cr | ₹0Cr | 4.1% | 1.06 | 2.55 | 11.0% |
| FY2024 | ₹0Cr | ₹0Cr | 5.1% | 1.02 | 2.34 | 12.2% |
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.