DuPont Decomposition
Why does LAXMICOT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.7% = 0.3% × 1.26 × 1.90
Latest: FY2025
Profitability
Net Margin
0.3%
2.5% →0.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.26x
2.01x →1.26x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.90x
14.85x →1.90x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 74.5 pp over 4 years. Driven by net margin declining (2.5% → 0.3%), asset turnover declining (2.01x → 1.26x), leverage falling (14.85x → 1.90x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.5% | 2.01 | 14.85 | 75.2% |
| FY2023 | ₹0Cr | ₹-0Cr | -4.1% | 1.46 | 2.06 | -12.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -0.2% | 1.20 | 1.91 | -0.4% |
| FY2025 | ₹0Cr | ₹0Cr | 0.3% | 1.26 | 1.90 | 0.7% |
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.