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
9.0% = 6.6% × 0.43 × 3.21
Latest: FY2026
Profitability
Net Margin
6.6%
8.1% →6.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.43x
0.51x →0.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.21x
3.10x →3.21x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.7 pp over 5 years. Driven by net margin declining (8.1% → 6.6%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.1% | 0.51 | 3.10 | 12.7% |
| FY2023 | ₹0Cr | ₹0Cr | 7.4% | 0.67 | 2.98 | 14.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.6% | 0.70 | 2.97 | 15.8% |
| FY2025 | ₹0Cr | ₹0Cr | 6.8% | 0.55 | 3.09 | 11.5% |
| FY2026 | ₹0Cr | ₹0Cr | 6.6% | 0.43 | 3.21 | 9.0% |
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.