DuPont Decomposition
Why does LANCORHOL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.4% = 2.5% × 0.45 × 2.15
Latest: FY2025
Profitability
Net Margin
2.5%
-16.5% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.45x
0.31x →0.45x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.15x
2.54x →2.15x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 15.4 pp over 4 years. Driven by net margin improving (-16.5% → 2.5%), asset turnover improving (0.31x → 0.45x), leverage falling (2.54x → 2.15x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -16.5% | 0.31 | 2.54 | -13.0% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.3% | 0.37 | 2.34 | -0.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.9% | 0.43 | 2.34 | 4.9% |
| FY2025 | ₹0Cr | ₹0Cr | 2.5% | 0.45 | 2.15 | 2.4% |
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.