DuPont Decomposition
Why does IVP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.9% = 3.1% × 1.74 × 2.18
Latest: FY2026
Profitability
Net Margin
3.1%
3.2% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.74x
1.50x →1.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.18x
4.04x →2.18x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.3 pp over 5 years. Driven by asset turnover improving (1.50x → 1.74x), leverage falling (4.04x → 2.18x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.2% | 1.50 | 4.04 | 19.2% |
| FY2023 | ₹0Cr | ₹0Cr | 4.3% | 1.72 | 3.23 | 23.6% |
| FY2024 | ₹0Cr | ₹0Cr | 2.3% | 1.65 | 2.55 | 9.5% |
| FY2025 | ₹0Cr | ₹0Cr | 2.1% | 1.55 | 2.49 | 8.1% |
| FY2026 | ₹0Cr | ₹0Cr | 3.1% | 1.74 | 2.18 | 11.9% |
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.