DuPont Decomposition
Why does ZYDUSLIFE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.6% = 18.9% × 0.51 × 1.93
Latest: FY2026
Profitability
Net Margin
18.9%
30.3% →18.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.51x
0.53x →0.51x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.93x
1.64x →1.93x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.8 pp over 5 years. Driven by net margin declining (30.3% → 18.9%), leverage rising (1.64x → 1.93x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 30.3% | 0.53 | 1.64 | 26.4% |
| FY2023 | ₹0Cr | ₹0Cr | 11.6% | 0.66 | 1.47 | 11.2% |
| FY2024 | ₹0Cr | ₹0Cr | 20.3% | 0.65 | 1.48 | 19.5% |
| FY2025 | ₹0Cr | ₹0Cr | 20.1% | 0.61 | 1.55 | 18.9% |
| FY2026 | ₹0Cr | ₹0Cr | 18.9% | 0.51 | 1.93 | 18.6% |
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.