DuPont Decomposition
Why does LINC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.1% = 7.0% × 1.58 × 1.45
Latest: FY2025
Profitability
Net Margin
7.0%
9.0% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.58x
0.58x →1.58x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.45x
1.34x →1.45x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.2 pp over 3 years. Driven by net margin declining (9.0% → 7.0%), asset turnover improving (0.58x → 1.58x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.0% | 0.58 | 1.34 | 7.0% |
| FY2024 | ₹0Cr | ₹0Cr | 8.3% | 0.45 | 1.51 | 5.7% |
| FY2025 | ₹0Cr | ₹0Cr | 7.0% | 1.58 | 1.45 | 16.1% |
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.