DuPont Decomposition
Why does LYKALABS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.7% = 6.0% × 0.76 × 1.70
Latest: FY2025
Profitability
Net Margin
6.0%
21.2% →6.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.76x
0.99x →0.76x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.70x
13.92x →1.70x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 284.6 pp over 4 years. Driven by net margin declining (21.2% → 6.0%), asset turnover declining (0.99x → 0.76x), leverage falling (13.92x → 1.70x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 21.2% | 0.99 | 13.92 | 292.4% |
| FY2023 | ₹0Cr | ₹-0Cr | -15.0% | 0.58 | 3.33 | -29.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -2.4% | 0.67 | 2.30 | -3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 6.0% | 0.76 | 1.70 | 7.7% |
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.