DuPont Decomposition
Why does UDS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.3% = 4.3% × 1.72 × 1.65
Latest: FY2025
Profitability
Net Margin
4.3%
3.7% →4.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.72x
1.70x →1.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
2.53x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.7 pp over 4 years. Driven by leverage falling (2.53x → 1.65x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.7% | 1.70 | 2.53 | 16.0% |
| FY2023 | ₹0Cr | ₹0Cr | 1.7% | 1.72 | 3.14 | 9.2% |
| FY2024 | ₹0Cr | ₹0Cr | 3.8% | 0.41 | 1.83 | 2.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.3% | 1.72 | 1.65 | 12.3% |
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.