DuPont Decomposition
Why does OFSS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
28.5% = 34.8% × 0.68 × 1.21
Latest: FY2025
Profitability
Net Margin
34.8%
32.6% →34.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
0.16x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.21x
1.24x →1.21x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 22.0 pp over 3 years. Driven by net margin improving (32.6% → 34.8%), asset turnover improving (0.16x → 0.68x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 32.6% | 0.16 | 1.24 | 6.4% |
| FY2024 | ₹0Cr | ₹0Cr | 39.5% | 0.18 | 1.11 | 7.8% |
| FY2025 | ₹0Cr | ₹0Cr | 34.8% | 0.68 | 1.21 | 28.5% |
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.