DuPont Decomposition
Why does LALPATHLAB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.4% = 19.8% × 0.91 × 1.25
Latest: FY2025
Profitability
Net Margin
19.8%
16.5% →19.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.89x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.56x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~22%. Driven by net margin improving (16.5% → 19.8%), leverage falling (1.56x → 1.25x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.5% | 0.89 | 1.56 | 22.9% |
| FY2023 | ₹0Cr | ₹0Cr | 11.8% | 0.85 | 1.43 | 14.3% |
| FY2024 | ₹0Cr | ₹0Cr | 16.1% | 0.91 | 1.33 | 19.3% |
| FY2025 | ₹0Cr | ₹0Cr | 19.8% | 0.91 | 1.25 | 22.4% |
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.