DuPont Decomposition
Why does IKIO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.5% = 6.4% × 0.72 × 1.20
Latest: FY2025
Profitability
Net Margin
6.4%
15.2% →6.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.72x
1.25x →0.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.20x
2.43x →1.20x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 40.9 pp over 4 years. Driven by net margin declining (15.2% → 6.4%), asset turnover declining (1.25x → 0.72x), leverage falling (2.43x → 1.20x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.2% | 1.25 | 2.43 | 46.4% |
| FY2023 | ₹0Cr | ₹0Cr | 13.9% | 1.15 | 2.19 | 35.2% |
| FY2024 | ₹0Cr | ₹0Cr | 13.8% | 0.67 | 1.19 | 11.0% |
| FY2025 | ₹0Cr | ₹0Cr | 6.4% | 0.72 | 1.20 | 5.5% |
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.