DuPont Decomposition
Why does OLECTRA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.2% = 7.7% × 0.83 × 2.07
Latest: FY2025
Profitability
Net Margin
7.7%
6.0% →7.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
0.50x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.07x
1.53x →2.07x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.7 pp over 4 years. Driven by net margin improving (6.0% → 7.7%), asset turnover improving (0.50x → 0.83x), leverage rising (1.53x → 2.07x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.0% | 0.50 | 1.53 | 4.5% |
| FY2023 | ₹0Cr | ₹0Cr | 6.0% | 0.70 | 1.85 | 7.8% |
| FY2024 | ₹0Cr | ₹0Cr | 6.7% | 0.72 | 1.74 | 8.4% |
| FY2025 | ₹0Cr | ₹0Cr | 7.7% | 0.83 | 2.07 | 13.2% |
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.