DuPont Decomposition
Why does INSPIRISYS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
54.2% = 8.2% × 1.45 × 4.56
Latest: FY2025
Profitability
Net Margin
8.2%
-3.9% →8.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.45x
1.71x →1.45x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.56x
252.68x →4.56x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1742.8 pp over 3 years. Driven by net margin improving (-3.9% → 8.2%), asset turnover declining (1.71x → 1.45x), leverage falling (252.68x → 4.56x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -3.9% | 1.71 | 252.68 | -1688.6% |
| FY2024 | ₹0Cr | ₹0Cr | 0.8% | 1.86 | 8.98 | 12.5% |
| FY2025 | ₹0Cr | ₹0Cr | 8.2% | 1.45 | 4.56 | 54.2% |
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.