DuPont Decomposition
Why does IGPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.1% = 4.9% × 1.00 × 1.65
Latest: FY2025
Profitability
Net Margin
4.9%
6.3% →4.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.00x
0.31x →1.00x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
1.58x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.0 pp over 3 years. Driven by net margin declining (6.3% → 4.9%), asset turnover improving (0.31x → 1.00x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 0.31 | 1.58 | 3.1% |
| FY2024 | ₹0Cr | ₹0Cr | 1.7% | 0.26 | 1.69 | 0.7% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 1.00 | 1.65 | 8.1% |
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.