DuPont Decomposition
Why does IMPAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.2% = 11.5% × 0.33 × 1.10
Latest: FY2026
Profitability
Net Margin
11.5%
9.4% →11.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.33x
0.47x →0.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.11x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~4%. Driven by net margin improving (9.4% → 11.5%), asset turnover declining (0.47x → 0.33x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.4% | 0.47 | 1.11 | 4.9% |
| FY2023 | ₹0Cr | ₹0Cr | 10.3% | 0.48 | 1.10 | 5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 10.0% | 0.32 | 1.12 | 3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 10.6% | 0.31 | 1.12 | 3.7% |
| FY2026 | ₹0Cr | ₹0Cr | 11.5% | 0.33 | 1.10 | 4.2% |
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.