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
-8.2% = -3.0% × 1.33 × 2.05
Latest: FY2026
Profitability
Net Margin
-3.0%
10.8% →-3.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.33x
0.83x →1.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.05x
2.63x →2.05x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 31.7 pp over 5 years. Driven by net margin declining (10.8% → -3.0%), asset turnover improving (0.83x → 1.33x), leverage falling (2.63x → 2.05x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.8% | 0.83 | 2.63 | 23.6% |
| FY2023 | ₹0Cr | ₹0Cr | 6.8% | 1.21 | 2.13 | 17.4% |
| FY2024 | ₹0Cr | ₹0Cr | 6.0% | 1.20 | 2.03 | 14.7% |
| FY2025 | ₹0Cr | ₹0Cr | 7.1% | 1.24 | 1.87 | 16.4% |
| FY2026 | ₹0Cr | ₹-0Cr | -3.0% | 1.33 | 2.05 | -8.2% |
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.