DuPont Decomposition
Why does ORCHPHARMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.6% = 2.5% × 0.42 × 1.48
Latest: FY2026
Profitability
Net Margin
2.5%
-0.3% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.42x
0.50x →0.42x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.48x
1.72x →1.48x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.9 pp over 5 years. Driven by net margin improving (-0.3% → 2.5%), leverage falling (1.72x → 1.48x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -0.3% | 0.50 | 1.72 | -0.3% |
| FY2023 | ₹0Cr | ₹0Cr | 7.0% | 0.54 | 1.78 | 6.7% |
| FY2024 | ₹0Cr | ₹0Cr | 11.3% | 0.53 | 1.33 | 7.9% |
| FY2025 | ₹0Cr | ₹0Cr | 10.8% | 0.55 | 1.33 | 7.9% |
| FY2026 | ₹0Cr | ₹0Cr | 2.5% | 0.42 | 1.48 | 1.6% |
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.