DuPont Decomposition
Why does INNOVANA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.9% = 42.7% × 0.37 × 1.32
Latest: FY2025
Profitability
Net Margin
42.7%
36.1% →42.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.37x
0.37x →0.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.32x
1.83x →1.32x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.2 pp over 4 years. Driven by net margin improving (36.1% → 42.7%), leverage falling (1.83x → 1.32x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 36.1% | 0.37 | 1.83 | 24.1% |
| FY2023 | ₹0Cr | ₹0Cr | 34.0% | 0.46 | 1.54 | 24.2% |
| FY2024 | ₹0Cr | ₹0Cr | 40.6% | 0.48 | 1.25 | 24.6% |
| FY2025 | ₹0Cr | ₹0Cr | 42.7% | 0.37 | 1.32 | 20.9% |
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.