DuPont Decomposition
Why does CHOLAHLDNG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.8% = 6.0% × 0.15 × 17.36
Latest: FY2026
Profitability
Net Margin
6.0%
6.5% →6.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.15x
0.16x →0.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
17.36x
15.17x →17.36x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~16%. Driven by leverage rising (15.17x → 17.36x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.5% | 0.16 | 15.17 | 15.9% |
| FY2023 | ₹0Cr | ₹0Cr | 6.7% | 0.15 | 8.16 | 8.0% |
| FY2024 | ₹0Cr | ₹0Cr | 6.5% | 0.15 | 17.27 | 17.3% |
| FY2025 | ₹0Cr | ₹0Cr | 6.2% | 0.16 | 17.95 | 17.4% |
| FY2026 | ₹0Cr | ₹0Cr | 6.0% | 0.15 | 17.36 | 15.8% |
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.