DuPont Decomposition
Why does ISHANCH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.0% = 1.1% × 0.46 × 2.14
Latest: FY2025
Profitability
Net Margin
1.1%
11.6% →1.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.46x
0.76x →0.46x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.14x
1.34x →2.14x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.8 pp over 4 years. Driven by net margin declining (11.6% → 1.1%), asset turnover declining (0.76x → 0.46x), leverage rising (1.34x → 2.14x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.6% | 0.76 | 1.34 | 11.8% |
| FY2023 | ₹0Cr | ₹-0Cr | -1.9% | 0.49 | 1.27 | -1.2% |
| FY2024 | ₹0Cr | ₹0Cr | 0.1% | 0.43 | 1.74 | 0.1% |
| FY2025 | ₹0Cr | ₹0Cr | 1.1% | 0.46 | 2.14 | 1.0% |
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.