DuPont Decomposition
Why does PARACABLES earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.1% = 5.6% × 1.71 × 1.27
Latest: FY2025
Profitability
Net Margin
5.6%
6.8% →5.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.71x
0.40x →1.71x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.27x
1.71x →1.27x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.5 pp over 3 years. Driven by net margin declining (6.8% → 5.6%), asset turnover improving (0.40x → 1.71x), leverage falling (1.71x → 1.27x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.8% | 0.40 | 1.71 | 4.7% |
| FY2024 | ₹0Cr | ₹0Cr | 9.1% | 0.39 | 1.32 | 4.7% |
| FY2025 | ₹0Cr | ₹0Cr | 5.6% | 1.71 | 1.27 | 12.1% |
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.