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 × 2.06
Latest: FY2025
Profitability
Net Margin
7.7%
6.1% →7.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
0.70x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.06x
1.85x →2.06x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.2 pp over 3 years. Driven by net margin improving (6.1% → 7.7%), asset turnover improving (0.70x → 0.83x), leverage rising (1.85x → 2.06x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.1% | 0.70 | 1.85 | 8.0% |
| FY2024 | ₹0Cr | ₹0Cr | 7.5% | 0.73 | 1.74 | 9.5% |
| FY2025 | ₹0Cr | ₹0Cr | 7.7% | 0.83 | 2.06 | 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.