DuPont Decomposition
Why does INTERARCH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.3% = 7.5% × 1.29 × 1.48
Latest: FY2025
Profitability
Net Margin
7.5%
2.1% →7.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.29x
1.50x →1.29x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.48x
1.71x →1.48x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.0 pp over 4 years. Driven by net margin improving (2.1% → 7.5%), asset turnover declining (1.50x → 1.29x), leverage falling (1.71x → 1.48x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.1% | 1.50 | 1.71 | 5.4% |
| FY2023 | ₹0Cr | ₹0Cr | 7.4% | 1.64 | 1.69 | 20.4% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 1.69 | 1.70 | 19.4% |
| FY2025 | ₹0Cr | ₹0Cr | 7.5% | 1.29 | 1.48 | 14.3% |
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.