DuPont Decomposition
Why does LIKHITHA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.5% = 13.3% × 1.22 × 1.14
Latest: FY2025
Profitability
Net Margin
13.3%
14.3% →13.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.22x
0.40x →1.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.14x
1.18x →1.14x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.8 pp over 3 years. Driven by asset turnover improving (0.40x → 1.22x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.3% | 0.40 | 1.18 | 6.7% |
| FY2024 | ₹0Cr | ₹0Cr | 14.5% | 0.35 | 1.13 | 5.7% |
| FY2025 | ₹0Cr | ₹0Cr | 13.3% | 1.22 | 1.14 | 18.5% |
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.