DuPont Decomposition
Why does INDOFARM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.4% = 5.6% × 0.57 × 1.38
Latest: FY2026
Profitability
Net Margin
5.6%
3.9% →5.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.57x
0.57x →0.57x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.38x
2.26x →1.38x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~4%. Driven by net margin improving (3.9% → 5.6%), leverage falling (2.26x → 1.38x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.9% | 0.57 | 2.26 | 5.0% |
| FY2023 | ₹0Cr | ₹0Cr | 4.2% | 0.59 | 2.14 | 5.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.1% | 0.58 | 2.04 | 4.9% |
| FY2025 | ₹0Cr | ₹0Cr | 6.1% | 0.51 | 1.43 | 4.4% |
| FY2026 | ₹0Cr | ₹0Cr | 5.6% | 0.57 | 1.38 | 4.4% |
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.