DuPont Decomposition
Why does THEINVEST earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.1% = 10.6% × 0.29 × 1.36
Latest: FY2026
Profitability
Net Margin
10.6%
0.5% →10.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.29x
0.31x →0.29x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.36x
1.68x →1.36x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.8 pp over 5 years. Driven by net margin improving (0.5% → 10.6%), leverage falling (1.68x → 1.36x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 0.5% | 0.31 | 1.68 | 0.3% |
| FY2023 | ₹0Cr | ₹0Cr | 3.9% | 0.28 | 1.64 | 1.8% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 0.21 | 1.97 | 2.8% |
| FY2025 | ₹0Cr | ₹0Cr | 12.1% | 0.23 | 2.19 | 6.0% |
| FY2026 | ₹0Cr | ₹0Cr | 10.6% | 0.29 | 1.36 | 4.1% |
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.