DuPont Decomposition
Why does IRCON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.4% = 6.9% × 0.54 × 3.07
Latest: FY2025
Profitability
Net Margin
6.9%
7.4% →6.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.54x
0.67x →0.54x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.07x
2.98x →3.07x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.2 pp over 3 years. Driven by asset turnover declining (0.67x → 0.54x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.4% | 0.67 | 2.98 | 14.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.6% | 0.71 | 2.97 | 15.8% |
| FY2025 | ₹0Cr | ₹0Cr | 6.9% | 0.54 | 3.07 | 11.4% |
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.