DuPont Decomposition
Why does JISLJALEQS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.6% = 0.6% × 0.50 × 1.99
Latest: FY2025
Profitability
Net Margin
0.6%
7.0% →0.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.50x
0.37x →0.50x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.99x
3.34x →1.99x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.0 pp over 4 years. Driven by net margin declining (7.0% → 0.6%), asset turnover improving (0.37x → 0.50x), leverage falling (3.34x → 1.99x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.0% | 0.37 | 3.34 | 8.6% |
| FY2023 | ₹0Cr | ₹0Cr | 66.6% | 0.16 | 2.12 | 22.4% |
| FY2024 | ₹0Cr | ₹-0Cr | -0.6% | 0.15 | 2.06 | -0.2% |
| FY2025 | ₹0Cr | ₹0Cr | 0.6% | 0.50 | 1.99 | 0.6% |
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.