DuPont Decomposition
Why does IOB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.7% = 29.4% × 0.04 × 12.78
Latest: FY2026
Profitability
Net Margin
29.4%
15.2% →29.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.04x
0.04x →0.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
12.78x
13.23x →12.78x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.1 pp over 5 years. Driven by net margin improving (15.2% → 29.4%), leverage falling (13.23x → 12.78x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.2% | 0.04 | 13.23 | 7.6% |
| FY2023 | ₹0Cr | ₹0Cr | 17.0% | 0.04 | 12.60 | 8.5% |
| FY2024 | ₹0Cr | ₹0Cr | 17.2% | 0.04 | 12.77 | 9.7% |
| FY2025 | ₹0Cr | ₹0Cr | 20.6% | 0.04 | 12.25 | 10.5% |
| FY2026 | ₹0Cr | ₹0Cr | 29.4% | 0.04 | 12.78 | 14.7% |
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.