DuPont Decomposition
Why does CHEMCON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.9% = 11.9% × 0.37 × 1.11
Latest: FY2025
Profitability
Net Margin
11.9%
24.4% →11.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.37x
0.52x →0.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.11x
1.19x →1.11x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.2 pp over 4 years. Driven by net margin declining (24.4% → 11.9%), asset turnover declining (0.52x → 0.37x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 24.4% | 0.52 | 1.19 | 15.0% |
| FY2023 | ₹0Cr | ₹0Cr | 18.3% | 0.54 | 1.21 | 12.1% |
| FY2024 | ₹0Cr | ₹0Cr | 7.2% | 0.49 | 1.14 | 4.0% |
| FY2025 | ₹0Cr | ₹0Cr | 11.9% | 0.37 | 1.11 | 4.9% |
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.