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
14.7% = 20.6% × 0.28 × 2.53
Latest: FY2026
Profitability
Net Margin
20.6%
13.1% →20.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.28x
0.24x →0.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.53x
3.18x →2.53x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.7 pp over 5 years. Driven by net margin improving (13.1% → 20.6%), leverage falling (3.18x → 2.53x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.1% | 0.24 | 3.18 | 10.0% |
| FY2023 | ₹0Cr | ₹0Cr | 5.2% | 0.24 | 3.09 | 3.8% |
| FY2024 | ₹0Cr | ₹0Cr | 15.2% | 0.22 | 2.70 | 8.9% |
| FY2025 | ₹0Cr | ₹0Cr | 20.1% | 0.28 | 2.47 | 13.7% |
| FY2026 | ₹0Cr | ₹0Cr | 20.6% | 0.28 | 2.53 | 14.7% |
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.