DuPont Decomposition
Why does COHANCE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.6% = 22.9% × 0.39 × 1.65
Latest: FY2025
Profitability
Net Margin
22.9%
33.6% →22.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.39x
0.19x →0.39x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
1.13x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.4 pp over 3 years. Driven by net margin declining (33.6% → 22.9%), asset turnover improving (0.19x → 0.39x), leverage rising (1.13x → 1.65x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 33.6% | 0.19 | 1.13 | 7.1% |
| FY2024 | ₹0Cr | ₹0Cr | 21.1% | 0.11 | 1.10 | 2.6% |
| FY2025 | ₹0Cr | ₹0Cr | 22.9% | 0.39 | 1.65 | 14.6% |
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.