DuPont Decomposition
Why does CUB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.9% = 35.0% × 0.04 × 8.20
Latest: FY2025
Profitability
Net Margin
35.0%
31.5% →35.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.04x
0.04x →0.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
8.20x
8.93x →8.20x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~12%. Driven by net margin improving (31.5% → 35.0%), leverage falling (8.93x → 8.20x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 31.5% | 0.04 | 8.93 | 12.6% |
| FY2025 | ₹0Cr | ₹0Cr | 35.0% | 0.04 | 8.20 | 11.9% |
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.