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
6.0% = 3.8% × 0.98 × 1.60
Latest: FY2025
Profitability
Net Margin
3.8%
3.6% →3.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.98x
0.31x →0.98x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.60x
1.64x →1.60x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.1 pp over 3 years. Driven by asset turnover improving (0.31x → 0.98x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 0.31 | 1.64 | 1.8% |
| FY2024 | ₹0Cr | ₹0Cr | 5.6% | 0.28 | 1.57 | 2.5% |
| FY2025 | ₹0Cr | ₹0Cr | 3.8% | 0.98 | 1.60 | 6.0% |
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.