DuPont Decomposition
Why does CTE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-70.7% = -24.2% × 1.01 × 2.89
Latest: FY2025
Profitability
Net Margin
-24.2%
8.7% →-24.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
0.84x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.89x
1.57x →2.89x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 82.2 pp over 4 years. Driven by net margin declining (8.7% → -24.2%), asset turnover improving (0.84x → 1.01x), leverage rising (1.57x → 2.89x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.7% | 0.84 | 1.57 | 11.5% |
| FY2023 | ₹0Cr | ₹0Cr | 4.5% | 1.03 | 1.78 | 8.2% |
| FY2024 | ₹0Cr | ₹0Cr | 2.7% | 0.76 | 2.42 | 5.0% |
| FY2025 | ₹0Cr | ₹-0Cr | -24.2% | 1.01 | 2.89 | -70.7% |
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.