DuPont Decomposition

Why does ERIS earn its ROE?

Breaking down Return on Equity into profitability, efficiency, and leverage.

ROE = Net Margin × Asset Turnover × Equity Multiplier

15.9% = 19.9% × 0.42 × 1.89

Latest: FY2026

Profitability

Net Margin

19.9%

30.6% →19.9%

How much profit per ₹ of revenue

Efficiency

Asset Turnover

0.42x

0.58x →0.42x

Revenue per ₹ of assets

Leverage

Equity Multiplier

1.89x

1.19x →1.89x

Assets funded by equity vs debt

Trend Analysis

ROE declined by 5.4 pp over 5 years. Driven by net margin declining (30.6% → 19.9%), asset turnover declining (0.58x → 0.42x), leverage rising (1.19x → 1.89x).

Historical Decomposition

Last 5 years

YearRevenuePATNet MarginAsset TOLeverageROE
FY20220Cr0Cr30.6%0.581.1921.3%
FY20230Cr0Cr23.0%0.451.6717.4%
FY20240Cr0Cr19.7%0.282.7215.2%
FY20250Cr0Cr12.2%0.412.4612.3%
FY20260Cr0Cr19.9%0.421.8915.9%

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)

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DuPont decomposition from audited annual financials. Factual analysis, not investment advice.

ERIS DuPont Analysis — ROE 15.9% | YieldIQ