DuPont Decomposition
Why does CHEMFAB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-1.8% = -2.1% × 0.64 × 1.37
Latest: FY2025
Profitability
Net Margin
-2.1%
10.6% →-2.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.77x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.37x
1.18x →1.37x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 11.5 pp over 4 years. Driven by net margin declining (10.6% → -2.1%), asset turnover declining (0.77x → 0.64x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.6% | 0.77 | 1.18 | 9.7% |
| FY2023 | ₹0Cr | ₹0Cr | 19.5% | 0.80 | 1.14 | 17.9% |
| FY2024 | ₹0Cr | ₹0Cr | 8.0% | 0.65 | 1.29 | 6.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -2.1% | 0.64 | 1.37 | -1.8% |
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.