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
16.2% = 7.0% × 1.58 × 1.45
Latest: FY2025
Profitability
Net Margin
7.0%
2.3% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.58x
1.74x →1.58x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.45x
1.41x →1.45x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.5 pp over 4 years. Driven by net margin improving (2.3% → 7.0%), asset turnover declining (1.74x → 1.58x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.3% | 1.74 | 1.41 | 5.7% |
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 2.03 | 1.34 | 21.1% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 1.63 | 1.51 | 16.7% |
| FY2025 | ₹0Cr | ₹0Cr | 7.0% | 1.58 | 1.45 | 16.2% |
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.