DuPont Decomposition
Why does PARAS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.1% = 18.5% × 0.49 × 1.33
Latest: FY2026
Profitability
Net Margin
18.5%
14.8% →18.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.49x
0.40x →0.49x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
1.21x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.0 pp over 5 years. Driven by net margin improving (14.8% → 18.5%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.8% | 0.40 | 1.21 | 7.2% |
| FY2023 | ₹0Cr | ₹0Cr | 16.3% | 0.42 | 1.26 | 8.7% |
| FY2024 | ₹0Cr | ₹0Cr | 12.7% | 0.40 | 1.44 | 7.2% |
| FY2025 | ₹0Cr | ₹0Cr | 17.4% | 0.43 | 1.33 | 9.9% |
| FY2026 | ₹0Cr | ₹0Cr | 18.5% | 0.49 | 1.33 | 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.