DuPont Decomposition
Why does PACEDIGITK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.1% = 11.0% × 0.92 × 2.19
Latest: FY2025
Profitability
Net Margin
11.0%
2.7% →11.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.92x
0.57x →0.92x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.19x
2.24x →2.19x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 18.7 pp over 4 years. Driven by net margin improving (2.7% → 11.0%), asset turnover improving (0.57x → 0.92x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.7% | 0.57 | 2.24 | 3.5% |
| FY2023 | ₹0Cr | ₹0Cr | 2.8% | 0.60 | 2.51 | 4.3% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 1.08 | 3.97 | 38.7% |
| FY2025 | ₹0Cr | ₹0Cr | 11.0% | 0.92 | 2.19 | 22.1% |
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.