DuPont Decomposition
Why does LAOPALA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.7% = 29.8% × 0.36 × 1.09
Latest: FY2025
Profitability
Net Margin
29.8%
27.2% →29.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.36x
0.50x →0.36x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.09x
1.16x →1.09x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.1 pp over 3 years. Driven by net margin improving (27.2% → 29.8%), asset turnover declining (0.50x → 0.36x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 27.2% | 0.50 | 1.16 | 15.9% |
| FY2024 | ₹0Cr | ₹0Cr | 35.0% | 0.39 | 1.09 | 15.0% |
| FY2025 | ₹0Cr | ₹0Cr | 29.8% | 0.36 | 1.09 | 11.7% |
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.