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
11.4% = 19.5% × 0.27 × 2.14
Latest: FY2026
Profitability
Net Margin
19.5%
21.9% →19.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.27x
0.42x →0.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.14x
1.99x →2.14x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.0 pp over 5 years. Driven by net margin declining (21.9% → 19.5%), asset turnover declining (0.42x → 0.27x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 21.9% | 0.42 | 1.99 | 18.4% |
| FY2023 | ₹0Cr | ₹0Cr | 24.2% | 0.49 | 1.92 | 22.7% |
| FY2024 | ₹0Cr | ₹0Cr | 19.5% | 0.35 | 1.91 | 13.1% |
| FY2025 | ₹0Cr | ₹0Cr | 20.1% | 0.31 | 2.10 | 13.2% |
| FY2026 | ₹0Cr | ₹0Cr | 19.5% | 0.27 | 2.14 | 11.4% |
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.