DuPont Decomposition
Why does LODHA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.7% = 20.2% × 0.27 × 2.46
Latest: FY2025
Profitability
Net Margin
20.2%
23.5% →20.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.27x
0.08x →0.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.46x
3.21x →2.46x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.9 pp over 3 years. Driven by net margin declining (23.5% → 20.2%), asset turnover improving (0.08x → 0.27x), leverage falling (3.21x → 2.46x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 23.5% | 0.08 | 3.21 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 16.6% | 0.09 | 2.70 | 3.8% |
| FY2025 | ₹0Cr | ₹0Cr | 20.2% | 0.27 | 2.46 | 13.7% |
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.