DuPont Decomposition
Why does IOLCP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.7% = 5.9% × 0.90 × 1.44
Latest: FY2026
Profitability
Net Margin
5.9%
7.7% →5.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.90x
1.11x →0.90x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.44x
1.41x →1.44x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.4 pp over 5 years. Driven by net margin declining (7.7% → 5.9%), asset turnover declining (1.11x → 0.90x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.7% | 1.11 | 1.41 | 12.0% |
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 1.09 | 1.34 | 9.2% |
| FY2024 | ₹0Cr | ₹0Cr | 6.3% | 0.94 | 1.39 | 8.3% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 0.87 | 1.41 | 6.0% |
| FY2026 | ₹0Cr | ₹0Cr | 5.9% | 0.90 | 1.44 | 7.7% |
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.