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%
28.4% →1.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
14.37x
0.07x →14.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.06x
1.05x →1.06x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 24.6 pp over 3 years. Driven by net margin declining (28.4% → 1.7%), asset turnover improving (0.07x → 14.37x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0.1Cr | ₹0Cr | 28.4% | 0.07 | 1.05 | 1.9% |
| FY2024 | ₹0Cr | ₹0Cr | 95.0% | 0.12 | 1.06 | 11.7% |
| 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.