DuPont Decomposition
Why does ROUTE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.9% = 7.0% × 1.20 × 1.55
Latest: FY2025
Profitability
Net Margin
7.0%
9.2% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.20x
2.81x →1.20x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
1.13x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 16.1 pp over 3 years. Driven by net margin declining (9.2% → 7.0%), asset turnover declining (2.81x → 1.20x), leverage rising (1.13x → 1.55x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.2% | 2.81 | 1.13 | 29.0% |
| FY2024 | ₹0Cr | ₹0Cr | 9.3% | 2.93 | 1.15 | 31.6% |
| FY2025 | ₹0Cr | ₹0Cr | 7.0% | 1.20 | 1.55 | 12.9% |
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.