DuPont Decomposition
Why does XCHANGING earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.8% = 26.8% × 0.37 × 1.41
Latest: FY2025
Profitability
Net Margin
26.8%
24.1% →26.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.37x
0.06x →0.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.41x
1.10x →1.41x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.2 pp over 3 years. Driven by net margin improving (24.1% → 26.8%), asset turnover improving (0.06x → 0.37x), leverage rising (1.10x → 1.41x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 24.1% | 0.06 | 1.10 | 1.6% |
| FY2024 | ₹0Cr | ₹0Cr | 27.9% | 0.08 | 1.48 | 3.5% |
| FY2025 | ₹0Cr | ₹0Cr | 26.8% | 0.37 | 1.41 | 13.8% |
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.