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
10.0% = 17.4% × 0.43 × 1.34
Latest: FY2025
Profitability
Net Margin
17.4%
18.2% →17.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.43x
0.13x →0.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.26x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.1 pp over 3 years. Driven by asset turnover improving (0.13x → 0.43x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 18.2% | 0.13 | 1.26 | 2.9% |
| FY2024 | ₹0Cr | ₹0Cr | 12.1% | 0.12 | 1.44 | 2.2% |
| FY2025 | ₹0Cr | ₹0Cr | 17.4% | 0.43 | 1.34 | 10.0% |
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.