DuPont Decomposition
Why does ORIENTCEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.0% = 3.4% × 0.96 × 1.55
Latest: FY2025
Profitability
Net Margin
3.4%
7.7% →3.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.96x
0.30x →0.96x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
1.79x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~5%. Driven by net margin declining (7.7% → 3.4%), asset turnover improving (0.30x → 0.96x), leverage falling (1.79x → 1.55x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.7% | 0.30 | 1.79 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 7.7% | 0.31 | 1.64 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 3.4% | 0.96 | 1.55 | 5.0% |
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.