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
16.1% = 11.6% × 0.95 × 1.46
Latest: FY2025
Profitability
Net Margin
11.6%
9.8% →11.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
0.32x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.46x
1.59x →1.46x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.1 pp over 3 years. Driven by net margin improving (9.8% → 11.6%), asset turnover improving (0.32x → 0.95x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.8% | 0.32 | 1.59 | 5.0% |
| FY2024 | ₹0Cr | ₹0Cr | 10.9% | 0.28 | 1.48 | 4.5% |
| FY2025 | ₹0Cr | ₹0Cr | 11.6% | 0.95 | 1.46 | 16.1% |
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.