DuPont Decomposition
Why does CENTUM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.6% = 0.2% × 0.91 × 3.14
Latest: FY2025
Profitability
Net Margin
0.2%
2.6% →0.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
1.25x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.14x
2.50x →3.14x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.5 pp over 3 years. Driven by net margin declining (2.6% → 0.2%), asset turnover declining (1.25x → 0.91x), leverage rising (2.50x → 3.14x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.6% | 1.25 | 2.50 | 8.1% |
| FY2024 | ₹0Cr | ₹0Cr | 0.2% | 0.99 | 5.23 | 0.9% |
| FY2025 | ₹0Cr | ₹0Cr | 0.2% | 0.91 | 3.14 | 0.6% |
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.