DuPont Decomposition
Why does ZIMLAB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.8% = 3.4% × 0.77 × 1.87
Latest: FY2025
Profitability
Net Margin
3.4%
4.4% →3.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.77x
0.96x →0.77x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.87x
1.94x →1.87x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.5 pp over 4 years. Driven by net margin declining (4.4% → 3.4%), asset turnover declining (0.96x → 0.77x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.4% | 0.96 | 1.94 | 8.3% |
| FY2023 | ₹0Cr | ₹0Cr | 6.9% | 0.31 | 1.70 | 3.6% |
| FY2024 | ₹0Cr | ₹0Cr | 6.7% | 0.27 | 1.91 | 3.4% |
| FY2025 | ₹0Cr | ₹0Cr | 3.4% | 0.77 | 1.87 | 4.8% |
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.