DuPont Decomposition
Why does UNIONBANK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.8% = 30.4% × 0.04 × 13.28
Latest: FY2025
Profitability
Net Margin
30.4%
12.7% →30.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.04x
0.03x →0.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
13.28x
16.85x →13.28x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.4 pp over 2 years. Driven by net margin improving (12.7% → 30.4%), leverage falling (16.85x → 13.28x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.7% | 0.03 | 16.85 | 7.4% |
| FY2025 | ₹0Cr | ₹0Cr | 30.4% | 0.04 | 13.28 | 15.8% |
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.