DuPont Decomposition
Why does ZUARI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.5% = 3.7% × 0.88 × 2.00
Latest: FY2025
Profitability
Net Margin
3.7%
3.6% →3.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.88x
0.57x →0.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.00x
7.42x →2.00x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.9 pp over 4 years. Driven by asset turnover improving (0.57x → 0.88x), leverage falling (7.42x → 2.00x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.6% | 0.57 | 7.42 | 15.4% |
| FY2023 | ₹0Cr | ₹0Cr | 10.5% | 0.90 | 2.39 | 22.5% |
| FY2024 | ₹0Cr | ₹0Cr | 2.2% | 0.95 | 2.10 | 4.4% |
| FY2025 | ₹0Cr | ₹0Cr | 3.7% | 0.88 | 2.00 | 6.5% |
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.