DuPont Decomposition
Why does CROMPTON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.4% = 7.1% × 1.24 × 1.65
Latest: FY2025
Profitability
Net Margin
7.1%
6.9% →7.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.24x
1.21x →1.24x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
2.13x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.5 pp over 3 years. Driven by leverage falling (2.13x → 1.65x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.9% | 1.21 | 2.13 | 17.9% |
| FY2024 | ₹0Cr | ₹0Cr | 6.0% | 1.20 | 2.03 | 14.7% |
| FY2025 | ₹0Cr | ₹0Cr | 7.1% | 1.24 | 1.65 | 14.4% |
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.