DuPont Decomposition
Why does IONEXCHANG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.2% = 7.7% × 0.91 × 2.47
Latest: FY2025
Profitability
Net Margin
7.7%
10.4% →7.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.96x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.47x
2.48x →2.47x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.7 pp over 4 years. Driven by net margin declining (10.4% → 7.7%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.4% | 0.96 | 2.48 | 24.9% |
| FY2023 | ₹0Cr | ₹0Cr | 9.9% | 1.02 | 2.32 | 23.5% |
| FY2024 | ₹0Cr | ₹0Cr | 8.4% | 0.95 | 2.40 | 19.2% |
| FY2025 | ₹0Cr | ₹0Cr | 7.7% | 0.91 | 2.47 | 17.2% |
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.