DuPont Decomposition
Why does DPSCLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.8% = 1.2% × 0.33 × 2.07
Latest: FY2025
Profitability
Net Margin
1.2%
2.9% →1.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.33x
0.23x →0.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.07x
1.68x →2.07x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~1%. Driven by net margin declining (2.9% → 1.2%), leverage rising (1.68x → 2.07x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.9% | 0.23 | 1.68 | 1.1% |
| FY2023 | ₹0Cr | ₹0Cr | 2.6% | 0.30 | 2.01 | 1.6% |
| FY2024 | ₹0Cr | ₹0Cr | 2.7% | 0.31 | 2.03 | 1.7% |
| FY2025 | ₹0Cr | ₹0Cr | 1.2% | 0.33 | 2.07 | 0.8% |
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.