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
7.9% = 10.9% × 0.54 × 1.33
Latest: FY2025
Profitability
Net Margin
10.9%
28.2% →10.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.54x
0.17x →0.54x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
1.78x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~8%. Driven by net margin declining (28.2% → 10.9%), asset turnover improving (0.17x → 0.54x), leverage falling (1.78x → 1.33x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 28.2% | 0.17 | 1.78 | 8.6% |
| FY2024 | ₹0Cr | ₹0Cr | 15.3% | 0.14 | 1.27 | 2.7% |
| FY2025 | ₹0Cr | ₹0Cr | 10.9% | 0.54 | 1.33 | 7.9% |
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.