DuPont Decomposition
Why does IRMENERGY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.3% = 5.0% × 0.82 × 1.30
Latest: FY2026
Profitability
Net Margin
5.0%
25.3% →5.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.82x
0.91x →0.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.30x
2.28x →1.30x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 47.2 pp over 5 years. Driven by net margin declining (25.3% → 5.0%), leverage falling (2.28x → 1.30x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 25.3% | 0.91 | 2.28 | 52.5% |
| FY2023 | ₹0Cr | ₹0Cr | 6.5% | 1.24 | 2.29 | 18.2% |
| FY2024 | ₹0Cr | ₹0Cr | 9.6% | 0.69 | 1.39 | 9.2% |
| FY2025 | ₹0Cr | ₹0Cr | 4.6% | 0.77 | 1.34 | 4.8% |
| FY2026 | ₹0Cr | ₹0Cr | 5.0% | 0.82 | 1.30 | 5.3% |
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.