DuPont Decomposition
Why does LICHSGFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.0% = 66.4% × 0.03 × 8.64
Latest: FY2025
Profitability
Net Margin
66.4%
12.7% →66.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.03x
0.08x →0.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
8.64x
10.25x →8.64x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.3 pp over 3 years. Driven by net margin improving (12.7% → 66.4%), leverage falling (10.25x → 8.64x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.7% | 0.08 | 10.25 | 10.6% |
| FY2024 | ₹0Cr | ₹0Cr | 17.5% | 0.09 | 9.28 | 15.2% |
| FY2025 | ₹0Cr | ₹0Cr | 66.4% | 0.03 | 8.64 | 15.0% |
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.