DuPont Decomposition
Why does INDRAMEDCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
27.0% = 12.3% × 1.53 × 1.43
Latest: FY2025
Profitability
Net Margin
12.3%
7.8% →12.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.53x
1.98x →1.53x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.43x
1.46x →1.43x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.3 pp over 3 years. Driven by net margin improving (7.8% → 12.3%), asset turnover declining (1.98x → 1.53x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 1.98 | 1.46 | 22.7% |
| FY2024 | ₹0Cr | ₹0Cr | 10.0% | 1.72 | 1.51 | 25.9% |
| FY2025 | ₹0Cr | ₹0Cr | 12.3% | 1.53 | 1.43 | 27.0% |
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.