DuPont Decomposition
Why does JGCHEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.5% = 7.5% × 1.70 × 1.05
Latest: FY2025
Profitability
Net Margin
7.5%
6.5% →7.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.70x
2.32x →1.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.05x
1.69x →1.05x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.0 pp over 4 years. Driven by net margin improving (6.5% → 7.5%), asset turnover declining (2.32x → 1.70x), leverage falling (1.69x → 1.05x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.5% | 2.32 | 1.69 | 25.5% |
| FY2023 | ₹0Cr | ₹0Cr | 7.0% | 2.63 | 1.39 | 25.7% |
| FY2024 | ₹0Cr | ₹0Cr | 4.8% | 1.49 | 1.13 | 8.1% |
| FY2025 | ₹0Cr | ₹0Cr | 7.5% | 1.70 | 1.05 | 13.5% |
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.