DuPont Decomposition
Why does WEALTH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
26.6% = 1.7% × 14.37 × 1.06
Latest: FY2025
Profitability
Net Margin
1.7%
1.3% →1.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
14.37x
20.64x →14.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.06x
1.09x →1.06x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.2 pp over 4 years. Driven by asset turnover declining (20.64x → 14.37x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.3% | 20.64 | 1.09 | 28.7% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 4.85 | 1.05 | 18.1% |
| FY2024 | ₹0Cr | ₹0Cr | 5.0% | 6.79 | 1.06 | 36.1% |
| FY2025 | ₹0Cr | ₹0Cr | 1.7% | 14.37 | 1.06 | 26.6% |
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.