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
13.2% = 21.8% × 0.13 × 4.54
Latest: FY2026
Profitability
Net Margin
21.8%
23.1% →21.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.13x
0.12x →0.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.54x
3.72x →4.54x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.5 pp over 5 years. Driven by net margin declining (23.1% → 21.8%), leverage rising (3.72x → 4.54x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 23.1% | 0.12 | 3.72 | 10.7% |
| FY2023 | ₹0Cr | ₹0Cr | 15.4% | 0.11 | 3.31 | 5.7% |
| FY2024 | ₹0Cr | ₹0Cr | 13.4% | 0.14 | 3.95 | 7.3% |
| FY2025 | ₹0Cr | ₹0Cr | 15.8% | 0.14 | 4.84 | 11.1% |
| FY2026 | ₹0Cr | ₹0Cr | 21.8% | 0.13 | 4.54 | 13.2% |
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.