DuPont Decomposition
Why does INNOVACAP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.9% = 8.8% × 0.87 × 1.68
Latest: FY2026
Profitability
Net Margin
8.8%
8.0% →8.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
1.39x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.68x
2.76x →1.68x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 17.7 pp over 5 years. Driven by asset turnover declining (1.39x → 0.87x), leverage falling (2.76x → 1.68x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.0% | 1.39 | 2.76 | 30.7% |
| FY2023 | ₹0Cr | ₹0Cr | 7.3% | 1.31 | 2.55 | 24.6% |
| FY2024 | ₹0Cr | ₹0Cr | 8.8% | 0.82 | 1.59 | 11.3% |
| FY2025 | ₹0Cr | ₹0Cr | 10.4% | 0.78 | 1.65 | 13.4% |
| FY2026 | ₹0Cr | ₹0Cr | 8.8% | 0.87 | 1.68 | 12.9% |
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.