DuPont Decomposition
Why does IVALUE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.5% = 9.3% × 0.79 × 2.52
Latest: FY2025
Profitability
Net Margin
9.3%
7.4% →9.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
0.81x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.52x
5.58x →2.52x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.0 pp over 4 years. Driven by net margin improving (7.4% → 9.3%), leverage falling (5.58x → 2.52x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.4% | 0.81 | 5.58 | 33.6% |
| FY2023 | ₹0Cr | ₹0Cr | 7.5% | 0.74 | 3.60 | 20.0% |
| FY2024 | ₹0Cr | ₹0Cr | 9.1% | 0.78 | 2.71 | 19.2% |
| FY2025 | ₹0Cr | ₹0Cr | 9.3% | 0.79 | 2.52 | 18.5% |
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.