DuPont Decomposition
Why does ISGEC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.8% = 3.9% × 0.79 × 2.82
Latest: FY2025
Profitability
Net Margin
3.9%
4.6% →3.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
0.29x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.82x
3.07x →2.82x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.7 pp over 3 years. Driven by asset turnover improving (0.29x → 0.79x), leverage falling (3.07x → 2.82x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.6% | 0.29 | 3.07 | 4.0% |
| FY2024 | ₹0Cr | ₹0Cr | 3.9% | 0.24 | 3.11 | 2.9% |
| FY2025 | ₹0Cr | ₹0Cr | 3.9% | 0.79 | 2.82 | 8.8% |
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.