DuPont Decomposition
Why does IKS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.8% = 22.6% × 0.75 × 1.52
Latest: FY2026
Profitability
Net Margin
22.6%
30.5% →22.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.75x
0.97x →0.75x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.52x
1.22x →1.52x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.2 pp over 5 years. Driven by net margin declining (30.5% → 22.6%), asset turnover declining (0.97x → 0.75x), leverage rising (1.22x → 1.52x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 30.5% | 0.97 | 1.22 | 36.0% |
| FY2023 | ₹0Cr | ₹0Cr | 29.6% | 1.04 | 1.19 | 36.8% |
| FY2024 | ₹0Cr | ₹0Cr | 20.4% | 0.60 | 2.61 | 32.0% |
| FY2025 | ₹0Cr | ₹0Cr | 18.3% | 0.87 | 1.71 | 27.2% |
| FY2026 | ₹0Cr | ₹0Cr | 22.6% | 0.75 | 1.52 | 25.8% |
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.