DuPont Decomposition
Why does IPCALAB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 11.8% × 0.78 × 1.53
Latest: FY2026
Profitability
Net Margin
11.8%
15.3% →11.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.78x
0.76x →0.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.53x
1.40x →1.53x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.0 pp over 5 years. Driven by net margin declining (15.3% → 11.8%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.3% | 0.76 | 1.40 | 16.2% |
| FY2023 | ₹0Cr | ₹0Cr | 7.6% | 0.72 | 1.48 | 8.1% |
| FY2024 | ₹0Cr | ₹0Cr | 7.2% | 0.69 | 1.75 | 8.6% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.76 | 1.69 | 10.6% |
| FY2026 | ₹0Cr | ₹0Cr | 11.8% | 0.78 | 1.53 | 14.2% |
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.