DuPont Decomposition
Why does CUMMINSIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
26.4% = 19.6% × 1.00 × 1.34
Latest: FY2025
Profitability
Net Margin
19.6%
15.8% →19.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.00x
0.98x →1.00x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.38x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.1 pp over 3 years. Driven by net margin improving (15.8% → 19.6%).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.8% | 0.98 | 1.38 | 21.3% |
| FY2024 | ₹0Cr | ₹0Cr | 19.1% | 1.00 | 1.36 | 26.0% |
| FY2025 | ₹0Cr | ₹0Cr | 19.6% | 1.00 | 1.34 | 26.4% |
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.