DuPont Decomposition
Why does OIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.0% = 20.1% × 0.31 × 1.91
Latest: FY2025
Profitability
Net Margin
20.1%
22.6% →20.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.12x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.91x
1.92x →1.91x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.8 pp over 3 years. Driven by net margin declining (22.6% → 20.1%), asset turnover improving (0.12x → 0.31x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 22.6% | 0.12 | 1.92 | 5.1% |
| FY2024 | ₹0Cr | ₹0Cr | 22.9% | 0.11 | 1.91 | 4.8% |
| FY2025 | ₹0Cr | ₹0Cr | 20.1% | 0.31 | 1.91 | 12.0% |
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.