DuPont Decomposition
Why does LAMBODHARA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.8% = 3.0% × 1.20 × 1.65
Latest: FY2025
Profitability
Net Margin
3.0%
8.7% →3.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.20x
1.15x →1.20x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
1.73x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 11.5 pp over 4 years. Driven by net margin declining (8.7% → 3.0%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.7% | 1.15 | 1.73 | 17.4% |
| FY2023 | ₹0Cr | ₹0Cr | 8.5% | 1.07 | 1.77 | 16.2% |
| FY2024 | ₹0Cr | ₹0Cr | 2.4% | 1.01 | 1.74 | 4.2% |
| FY2025 | ₹0Cr | ₹0Cr | 3.0% | 1.20 | 1.65 | 5.8% |
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.