DuPont Decomposition
Why does LUPIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.0% = 14.8% × 0.76 × 1.69
Latest: FY2025
Profitability
Net Margin
14.8%
5.5% →14.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.76x
0.19x →0.76x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.69x
1.84x →1.69x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 17.0 pp over 3 years. Driven by net margin improving (5.5% → 14.8%), asset turnover improving (0.19x → 0.76x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.5% | 0.19 | 1.84 | 1.9% |
| FY2024 | ₹0Cr | ₹0Cr | 7.4% | 0.21 | 1.68 | 2.6% |
| FY2025 | ₹0Cr | ₹0Cr | 14.8% | 0.76 | 1.69 | 19.0% |
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.