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
-0.9% = -1.1% × 0.54 × 1.54
Latest: FY2026
Profitability
Net Margin
-1.1%
10.6% →-1.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.54x
0.77x →0.54x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.54x
1.18x →1.54x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.6 pp over 5 years. Driven by net margin declining (10.6% → -1.1%), asset turnover declining (0.77x → 0.54x), leverage rising (1.18x → 1.54x).
Historical Decomposition
Last 5 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 | 8.1% | 0.65 | 1.29 | 6.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -2.1% | 0.64 | 1.37 | -1.8% |
| FY2026 | ₹0Cr | ₹-0Cr | -1.1% | 0.54 | 1.54 | -0.9% |
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.