DuPont Decomposition
Why does CDSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
29.2% = 48.7% × 0.50 × 1.20
Latest: FY2025
Profitability
Net Margin
48.7%
50.6% →48.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.50x
0.09x →0.50x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.20x
1.20x →1.20x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 24.0 pp over 3 years. Driven by net margin declining (50.6% → 48.7%), asset turnover improving (0.09x → 0.50x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 50.6% | 0.09 | 1.20 | 5.2% |
| FY2024 | ₹0Cr | ₹0Cr | 53.8% | 0.14 | 1.22 | 8.8% |
| FY2025 | ₹0Cr | ₹0Cr | 48.7% | 0.50 | 1.20 | 29.2% |
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.