DuPont Decomposition
Why does CESC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.3% = 8.3% × 0.40 × 3.71
Latest: FY2026
Profitability
Net Margin
8.3%
10.8% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.40x
0.33x →0.40x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.71x
3.61x →3.71x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~12%. Driven by net margin declining (10.8% → 8.3%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.8% | 0.33 | 3.61 | 13.1% |
| FY2023 | ₹0Cr | ₹0Cr | 9.4% | 0.38 | 3.46 | 12.3% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 0.41 | 3.25 | 12.0% |
| FY2025 | ₹0Cr | ₹0Cr | 8.1% | 0.41 | 3.41 | 11.4% |
| FY2026 | ₹0Cr | ₹0Cr | 8.3% | 0.40 | 3.71 | 12.3% |
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.