DuPont Decomposition
Why does JPPOWER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.6% = 14.9% × 0.31 × 1.45
Latest: FY2025
Profitability
Net Margin
14.9%
1.0% →14.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.33x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.45x
1.66x →1.45x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.1 pp over 3 years. Driven by net margin improving (1.0% → 14.9%), leverage falling (1.66x → 1.45x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.0% | 0.33 | 1.66 | 0.5% |
| FY2024 | ₹0Cr | ₹0Cr | 8.7% | 0.39 | 1.51 | 5.1% |
| FY2025 | ₹0Cr | ₹0Cr | 14.9% | 0.31 | 1.45 | 6.6% |
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.