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
0.2% = 0.1% × 0.84 × 1.73
Latest: FY2026
Profitability
Net Margin
0.1%
14.1% →0.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.84x
1.14x →0.84x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.73x
1.55x →1.73x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 24.7 pp over 5 years. Driven by net margin declining (14.1% → 0.1%), asset turnover declining (1.14x → 0.84x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.1% | 1.14 | 1.55 | 24.9% |
| FY2023 | ₹0Cr | ₹0Cr | 8.5% | 1.18 | 1.61 | 16.2% |
| FY2024 | ₹0Cr | ₹0Cr | 1.9% | 0.98 | 1.71 | 3.2% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 1.00 | 1.65 | 8.1% |
| FY2026 | ₹0Cr | ₹0Cr | 0.1% | 0.84 | 1.73 | 0.2% |
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.