DuPont Decomposition
Why does CAMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
42.0% = 33.0% × 0.89 × 1.43
Latest: FY2025
Profitability
Net Margin
33.0%
29.8% →33.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.89x
0.23x →0.89x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.43x
1.40x →1.43x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 32.5 pp over 3 years. Driven by net margin improving (29.8% → 33.0%), asset turnover improving (0.23x → 0.89x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 29.8% | 0.23 | 1.40 | 9.5% |
| FY2024 | ₹0Cr | ₹0Cr | 33.2% | 0.22 | 1.55 | 11.3% |
| FY2025 | ₹0Cr | ₹0Cr | 33.0% | 0.89 | 1.43 | 42.0% |
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.