DuPont Decomposition
Why does CGPOWER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
24.1% = 9.9% × 1.32 × 1.84
Latest: FY2025
Profitability
Net Margin
9.9%
13.8% →9.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.32x
1.51x →1.32x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.84x
2.59x →1.84x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 29.6 pp over 3 years. Driven by net margin declining (13.8% → 9.9%), asset turnover declining (1.51x → 1.32x), leverage falling (2.59x → 1.84x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.8% | 1.51 | 2.59 | 53.8% |
| FY2024 | ₹0Cr | ₹0Cr | 17.7% | 1.43 | 1.86 | 47.3% |
| FY2025 | ₹0Cr | ₹0Cr | 9.9% | 1.32 | 1.84 | 24.1% |
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.