DuPont Decomposition
Why does LOVABLE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.9% = 7.9% × 0.21 × 1.10
Latest: FY2026
Profitability
Net Margin
7.9%
5.9% →7.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.21x
0.47x →0.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.19x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.5 pp over 5 years. Driven by net margin improving (5.9% → 7.9%), asset turnover declining (0.47x → 0.21x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.9% | 0.47 | 1.19 | 3.3% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.1% | 0.44 | 1.25 | -0.0% |
| FY2024 | ₹0Cr | ₹0Cr | 6.7% | 0.30 | 1.20 | 2.4% |
| FY2025 | ₹0Cr | ₹0Cr | 4.2% | 0.20 | 1.18 | 1.0% |
| FY2026 | ₹0Cr | ₹0Cr | 7.9% | 0.21 | 1.10 | 1.9% |
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.