DuPont Decomposition
Why does CNL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.9% = 2.6% × 3.34 × 1.72
Latest: FY2025
Profitability
Net Margin
2.6%
1.8% →2.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
3.34x
4.84x →3.34x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.72x
2.45x →1.72x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.0 pp over 3 years. Driven by asset turnover declining (4.84x → 3.34x), leverage falling (2.45x → 1.72x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.8% | 4.84 | 2.45 | 20.9% |
| FY2024 | ₹0Cr | ₹0Cr | 2.6% | 5.11 | 1.59 | 20.9% |
| FY2025 | ₹0Cr | ₹0Cr | 2.6% | 3.34 | 1.72 | 14.9% |
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.