DuPont Decomposition
Why does IGL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.5% = 9.6% × 0.95 × 1.48
Latest: FY2026
Profitability
Net Margin
9.6%
19.6% →9.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
0.69x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.48x
1.46x →1.48x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.3 pp over 5 years. Driven by net margin declining (19.6% → 9.6%), asset turnover improving (0.69x → 0.95x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 19.6% | 0.69 | 1.46 | 19.8% |
| FY2023 | ₹0Cr | ₹0Cr | 11.6% | 1.12 | 1.59 | 20.7% |
| FY2024 | ₹0Cr | ₹0Cr | 14.2% | 0.98 | 1.48 | 20.6% |
| FY2025 | ₹0Cr | ₹0Cr | 11.5% | 0.96 | 1.47 | 16.2% |
| FY2026 | ₹0Cr | ₹0Cr | 9.6% | 0.95 | 1.48 | 13.5% |
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.