DuPont Decomposition
Why does UGROCAP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.0% = 14.9% × 0.11 × 4.48
Latest: FY2025
Profitability
Net Margin
14.9%
6.7% →14.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.11x
0.05x →0.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.48x
4.38x →4.48x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.6 pp over 3 years. Driven by net margin improving (6.7% → 14.9%). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.7% | 0.05 | 4.38 | 1.4% |
| FY2024 | ₹0Cr | ₹0Cr | 10.1% | 0.05 | 4.37 | 2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 14.9% | 0.11 | 4.48 | 7.0% |
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.