DuPont Decomposition
Why does UFO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.7% = 5.2% × 0.75 × 1.97
Latest: FY2026
Profitability
Net Margin
5.2%
-57.9% →5.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.75x
0.28x →0.75x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.97x
1.93x →1.97x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 39.2 pp over 5 years. Driven by net margin improving (-57.9% → 5.2%), asset turnover improving (0.28x → 0.75x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -57.9% | 0.28 | 1.93 | -31.5% |
| FY2023 | ₹0Cr | ₹-0Cr | -3.4% | 0.72 | 1.98 | -4.9% |
| FY2024 | ₹0Cr | ₹0Cr | 4.1% | 0.74 | 1.88 | 5.7% |
| FY2025 | ₹0Cr | ₹0Cr | 2.3% | 0.75 | 1.88 | 3.2% |
| FY2026 | ₹0Cr | ₹0Cr | 5.2% | 0.75 | 1.97 | 7.7% |
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.