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
11.3% = 14.0% × 0.65 × 1.23
Latest: FY2026
Profitability
Net Margin
14.0%
11.6% →14.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.65x
0.80x →0.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.23x
1.30x →1.23x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~11%. Driven by net margin improving (11.6% → 14.0%), asset turnover declining (0.80x → 0.65x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.6% | 0.80 | 1.30 | 12.1% |
| FY2023 | ₹0Cr | ₹0Cr | 12.5% | 0.76 | 1.26 | 12.0% |
| FY2024 | ₹0Cr | ₹0Cr | 16.2% | 0.78 | 1.23 | 15.4% |
| FY2025 | ₹0Cr | ₹0Cr | 19.4% | 0.73 | 1.20 | 16.9% |
| FY2026 | ₹0Cr | ₹0Cr | 14.0% | 0.65 | 1.23 | 11.3% |
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.