DuPont Decomposition
Why does IOC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.2% = 5.4% × 1.48 × 2.41
Latest: FY2026
Profitability
Net Margin
5.4%
4.3% →5.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.48x
1.43x →1.48x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.41x
3.08x →2.41x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~19%. Driven by net margin improving (4.3% → 5.4%), leverage falling (3.08x → 2.41x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0.1Cr | ₹0Cr | 4.3% | 1.43 | 3.08 | 18.8% |
| FY2023 | ₹0.1Cr | ₹0Cr | 1.2% | 1.87 | 3.16 | 7.0% |
| FY2024 | ₹0.1Cr | ₹0Cr | 5.4% | 1.60 | 2.63 | 22.8% |
| FY2025 | ₹0.1Cr | ₹0Cr | 1.8% | 1.50 | 2.72 | 7.3% |
| FY2026 | ₹0.1Cr | ₹0Cr | 5.4% | 1.48 | 2.41 | 19.2% |
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.