DuPont Decomposition
Why does CIPLA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.9% = 19.4% × 0.73 × 1.19
Latest: FY2025
Profitability
Net Margin
19.4%
9.1% →19.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
0.19x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.19x
1.26x →1.19x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.6 pp over 3 years. Driven by net margin improving (9.1% → 19.4%), asset turnover improving (0.19x → 0.73x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.1% | 0.19 | 1.26 | 2.2% |
| FY2024 | ₹0Cr | ₹0Cr | 25.7% | 0.13 | 1.11 | 3.7% |
| FY2025 | ₹0Cr | ₹0Cr | 19.4% | 0.73 | 1.19 | 16.9% |
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.