DuPont Decomposition
Why does LXCHEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.0% = 2.8% × 0.83 × 1.74
Latest: FY2026
Profitability
Net Margin
2.8%
8.4% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
1.37x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.74x
1.74x →1.74x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.9 pp over 5 years. Driven by net margin declining (8.4% → 2.8%), asset turnover declining (1.37x → 0.83x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.4% | 1.37 | 1.74 | 19.9% |
| FY2023 | ₹0Cr | ₹0Cr | 4.5% | 1.16 | 1.71 | 8.8% |
| FY2024 | ₹0Cr | ₹0Cr | 4.3% | 1.00 | 1.57 | 6.7% |
| FY2025 | ₹0Cr | ₹0Cr | 3.8% | 0.98 | 1.60 | 6.0% |
| FY2026 | ₹0Cr | ₹0Cr | 2.8% | 0.83 | 1.74 | 4.0% |
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.