DuPont Decomposition
Why does ITDC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
23.1% = 14.3% × 0.76 × 2.12
Latest: FY2025
Profitability
Net Margin
14.3%
12.0% →14.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.76x
0.49x →0.76x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.12x
2.73x →2.12x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.0 pp over 3 years. Driven by net margin improving (12.0% → 14.3%), asset turnover improving (0.49x → 0.76x), leverage falling (2.73x → 2.12x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.0% | 0.49 | 2.73 | 16.1% |
| FY2024 | ₹0Cr | ₹0Cr | 12.8% | 0.47 | 2.74 | 16.6% |
| FY2025 | ₹0Cr | ₹0Cr | 14.3% | 0.76 | 2.12 | 23.1% |
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.