DuPont Decomposition
Why does INDOUS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.7% = 15.7% × 1.06 × 1.25
Latest: FY2025
Profitability
Net Margin
15.7%
10.1% →15.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.06x
0.90x →1.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.44x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.6 pp over 4 years. Driven by net margin improving (10.1% → 15.7%), asset turnover improving (0.90x → 1.06x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.1% | 0.90 | 1.44 | 13.2% |
| FY2023 | ₹0Cr | ₹0Cr | 11.7% | 0.89 | 1.27 | 13.3% |
| FY2024 | ₹0Cr | ₹0Cr | 11.3% | 0.86 | 1.35 | 13.1% |
| FY2025 | ₹0Cr | ₹0Cr | 15.7% | 1.06 | 1.25 | 20.7% |
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.