DuPont Decomposition
Why does CPPLUS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
34.5% = 11.3% × 0.98 × 3.12
Latest: FY2025
Profitability
Net Margin
11.3%
5.9% →11.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.98x
1.35x →0.98x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.12x
4.23x →3.12x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~35%. Driven by net margin improving (5.9% → 11.3%), asset turnover declining (1.35x → 0.98x), leverage falling (4.23x → 3.12x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.9% | 1.35 | 4.23 | 33.8% |
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 1.34 | 5.48 | 34.8% |
| FY2024 | ₹0Cr | ₹0Cr | 4.1% | 1.69 | 3.88 | 27.1% |
| FY2025 | ₹0Cr | ₹0Cr | 11.3% | 0.98 | 3.12 | 34.5% |
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.