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
5.7% = 12.6% × 0.22 × 2.05
Latest: FY2025
Profitability
Net Margin
12.6%
28.1% →12.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.22x
0.03x →0.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.05x
1.14x →2.05x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.7 pp over 3 years. Driven by net margin declining (28.1% → 12.6%), asset turnover improving (0.03x → 0.22x), leverage rising (1.14x → 2.05x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 28.1% | 0.03 | 1.14 | 0.9% |
| FY2024 | ₹0Cr | ₹0Cr | 5.3% | 0.07 | 1.97 | 0.7% |
| FY2025 | ₹0Cr | ₹0Cr | 12.6% | 0.22 | 2.05 | 5.7% |
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.