DuPont Decomposition
Why does IRIS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
63.0% = 98.4% × 0.51 × 1.26
Latest: FY2026
Profitability
Net Margin
98.4%
1.6% →98.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.51x
1.02x →0.51x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.26x
2.21x →1.26x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 59.4 pp over 5 years. Driven by net margin improving (1.6% → 98.4%), asset turnover declining (1.02x → 0.51x), leverage falling (2.21x → 1.26x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.6% | 1.02 | 2.21 | 3.7% |
| FY2023 | ₹0Cr | ₹0Cr | 5.8% | 1.05 | 2.22 | 13.5% |
| FY2024 | ₹0Cr | ₹0Cr | 8.5% | 1.33 | 1.88 | 21.2% |
| FY2025 | ₹0Cr | ₹0Cr | 11.9% | 0.87 | 1.66 | 17.2% |
| FY2026 | ₹0Cr | ₹0Cr | 98.4% | 0.51 | 1.26 | 63.0% |
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.