DuPont Decomposition
Why does CGCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.1% = 16.3% × 0.14 × 4.84
Latest: FY2025
Profitability
Net Margin
16.3%
14.3% →16.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.14x
0.04x →0.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.84x
3.31x →4.84x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.3 pp over 3 years. Driven by net margin improving (14.3% → 16.3%), leverage rising (3.31x → 4.84x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.3% | 0.04 | 3.31 | 1.8% |
| FY2024 | ₹0Cr | ₹0Cr | 12.7% | 0.04 | 3.95 | 2.1% |
| FY2025 | ₹0Cr | ₹0Cr | 16.3% | 0.14 | 4.84 | 11.1% |
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.