DuPont Decomposition
Why does INDORAMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
28.9% = 3.1% × 1.51 × 6.25
Latest: FY2026
Profitability
Net Margin
3.1%
6.9% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.51x
1.86x →1.51x
Revenue per ₹ of assets
Leverage
Equity Multiplier
6.25x
3.51x →6.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.9 pp over 5 years. Driven by net margin declining (6.9% → 3.1%), asset turnover declining (1.86x → 1.51x), leverage rising (3.51x → 6.25x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.9% | 1.86 | 3.51 | 44.8% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.6% | 1.44 | 4.74 | -4.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -5.5% | 1.27 | 7.90 | -55.3% |
| FY2025 | ₹0Cr | ₹0Cr | 0.0% | 1.45 | 7.97 | 0.4% |
| FY2026 | ₹0Cr | ₹0Cr | 3.1% | 1.51 | 6.25 | 28.9% |
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.