DuPont Decomposition
Why does CHEMPLASTS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-5.3% = -2.5% × 0.67 × 3.14
Latest: FY2025
Profitability
Net Margin
-2.5%
4.0% →-2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.67x
0.20x →0.67x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.14x
3.14x →3.14x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.8 pp over 3 years. Driven by net margin declining (4.0% → -2.5%), asset turnover improving (0.20x → 0.67x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.0% | 0.20 | 3.14 | 2.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -3.0% | 0.17 | 3.55 | -1.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -2.5% | 0.67 | 3.14 | -5.3% |
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.