DuPont Decomposition
Why does IRB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.1% = 13.4% × 0.12 × 2.58
Latest: FY2026
Profitability
Net Margin
13.4%
6.3% →13.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.12x
0.13x →0.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.58x
3.39x →2.58x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.2 pp over 5 years. Driven by net margin improving (6.3% → 13.4%), leverage falling (3.39x → 2.58x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.3% | 0.13 | 3.39 | 2.9% |
| FY2023 | ₹0Cr | ₹0Cr | 11.4% | 0.15 | 3.20 | 5.4% |
| FY2024 | ₹0Cr | ₹0Cr | 8.2% | 0.16 | 3.27 | 4.4% |
| FY2025 | ₹0Cr | ₹0Cr | 91.8% | 0.13 | 2.72 | 32.7% |
| FY2026 | ₹0Cr | ₹0Cr | 13.4% | 0.12 | 2.58 | 4.1% |
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.