DuPont Decomposition
Why does CELLO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.1% = 15.9% × 0.81 × 1.10
Latest: FY2025
Profitability
Net Margin
15.9%
15.1% →15.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
1.01x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
4.89x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 60.7 pp over 4 years. Driven by asset turnover declining (1.01x → 0.81x), leverage falling (4.89x → 1.10x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.1% | 1.01 | 4.89 | 74.8% |
| FY2023 | ₹0Cr | ₹0Cr | 14.9% | 1.15 | 2.89 | 49.6% |
| FY2024 | ₹0Cr | ₹0Cr | 6.1% | 0.92 | 1.55 | 8.7% |
| FY2025 | ₹0Cr | ₹0Cr | 15.9% | 0.81 | 1.10 | 14.1% |
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.