DuPont Decomposition
Why does CCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.8% = 10.0% × 0.73 × 2.16
Latest: FY2025
Profitability
Net Margin
10.0%
16.4% →10.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
0.20x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.16x
1.75x →2.16x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.0 pp over 3 years. Driven by net margin declining (16.4% → 10.0%), asset turnover improving (0.20x → 0.73x), leverage rising (1.75x → 2.16x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.4% | 0.20 | 1.75 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 0.21 | 2.11 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 10.0% | 0.73 | 2.16 | 15.8% |
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.