DuPont Decomposition
Why does INDIGO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-34.3% = -2.8% × 0.62 × 19.51
Latest: FY2026
Profitability
Net Margin
-2.8%
12.1% →-2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.62x
0.82x →0.62x
Revenue per ₹ of assets
Leverage
Equity Multiplier
19.51x
41.18x →19.51x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 443.6 pp over 3 years. Driven by net margin declining (12.1% → -2.8%), asset turnover declining (0.82x → 0.62x), leverage falling (41.18x → 19.51x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 12.1% | 0.82 | 41.18 | 409.3% |
| FY2025 | ₹0Cr | ₹0Cr | 9.0% | 0.70 | 12.37 | 77.5% |
| FY2026 | ₹0Cr | ₹-0Cr | -2.8% | 0.62 | 19.51 | -34.3% |
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.