DuPont Decomposition
Why does IVC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.4% = 45.2% × 0.12 × 1.17
Latest: FY2025
Profitability
Net Margin
45.2%
18.7% →45.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.12x
0.16x →0.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.17x
1.21x →1.17x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.7 pp over 4 years. Driven by net margin improving (18.7% → 45.2%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 18.7% | 0.16 | 1.21 | 3.7% |
| FY2023 | ₹0Cr | ₹0Cr | 18.6% | 0.24 | 1.23 | 5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 19.5% | 0.21 | 1.23 | 5.0% |
| FY2025 | ₹0Cr | ₹0Cr | 45.2% | 0.12 | 1.17 | 6.4% |
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.