DuPont Decomposition
Why does IMFA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.6% = 15.0% × 0.65 × 1.59
Latest: FY2026
Profitability
Net Margin
15.0%
19.8% →15.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.65x
0.91x →0.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.59x
1.64x →1.59x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.0 pp over 5 years. Driven by net margin declining (19.8% → 15.0%), asset turnover declining (0.91x → 0.65x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 19.8% | 0.91 | 1.64 | 29.6% |
| FY2023 | ₹0Cr | ₹0Cr | 8.5% | 0.99 | 1.42 | 12.0% |
| FY2024 | ₹0Cr | ₹0Cr | 12.5% | 0.94 | 1.38 | 16.3% |
| FY2025 | ₹0Cr | ₹0Cr | 14.8% | 0.81 | 1.35 | 16.1% |
| FY2026 | ₹0Cr | ₹0Cr | 15.0% | 0.65 | 1.59 | 15.6% |
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.