DuPont Decomposition
Why does PARAGMILK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.6% = 3.6% × 1.64 × 1.99
Latest: FY2025
Profitability
Net Margin
3.6%
2.8% →3.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.64x
0.48x →1.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.99x
2.06x →1.99x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.8 pp over 3 years. Driven by asset turnover improving (0.48x → 1.64x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.8% | 0.48 | 2.06 | 2.8% |
| FY2024 | ₹0Cr | ₹0Cr | 1.2% | 0.42 | 2.07 | 1.1% |
| FY2025 | ₹0Cr | ₹0Cr | 3.6% | 1.64 | 1.99 | 11.6% |
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.