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
17.1% = 10.3% × 1.00 × 1.65
Latest: FY2025
Profitability
Net Margin
10.3%
7.7% →10.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.00x
0.29x →1.00x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
2.22x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.1 pp over 3 years. Driven by net margin improving (7.7% → 10.3%), asset turnover improving (0.29x → 1.00x), leverage falling (2.22x → 1.65x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.7% | 0.29 | 2.22 | 5.0% |
| FY2024 | ₹0Cr | ₹0Cr | 16.0% | 0.38 | 1.75 | 10.6% |
| FY2025 | ₹0Cr | ₹0Cr | 10.3% | 1.00 | 1.65 | 17.1% |
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.