DuPont Decomposition
Why does PALREDTEC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-16.8% = -9.1% × 0.74 × 2.50
Latest: FY2025
Profitability
Net Margin
-9.1%
-1.3% →-9.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.74x
1.69x →0.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.50x
1.97x →2.50x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.3 pp over 4 years. Driven by net margin declining (-1.3% → -9.1%), asset turnover declining (1.69x → 0.74x), leverage rising (1.97x → 2.50x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -1.3% | 1.69 | 1.97 | -4.5% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.0% | 1.14 | 2.10 | -0.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -3.0% | 0.90 | 2.28 | -6.0% |
| FY2025 | ₹0Cr | ₹-0Cr | -9.1% | 0.74 | 2.50 | -16.8% |
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.