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
18.6% = 13.3% × 1.22 × 1.14
Latest: FY2025
Profitability
Net Margin
13.3%
17.9% →13.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.22x
1.19x →1.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.14x
1.12x →1.14x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.3 pp over 4 years. Driven by net margin declining (17.9% → 13.3%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 17.9% | 1.19 | 1.12 | 23.9% |
| FY2023 | ₹0Cr | ₹0Cr | 16.3% | 1.23 | 1.18 | 23.8% |
| FY2024 | ₹0Cr | ₹0Cr | 15.5% | 1.20 | 1.13 | 21.1% |
| FY2025 | ₹0Cr | ₹0Cr | 13.3% | 1.22 | 1.14 | 18.6% |
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.