DuPont Decomposition
Why does PARKHOTELS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.5% = 13.7% × 0.37 × 1.30
Latest: FY2025
Profitability
Net Margin
13.7%
-11.3% →13.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.37x
0.20x →0.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.30x
2.51x →1.30x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.1 pp over 4 years. Driven by net margin improving (-11.3% → 13.7%), asset turnover improving (0.20x → 0.37x), leverage falling (2.51x → 1.30x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -11.3% | 0.20 | 2.51 | -5.5% |
| FY2023 | ₹0Cr | ₹0Cr | 9.7% | 0.36 | 2.45 | 8.7% |
| FY2024 | ₹0Cr | ₹0Cr | 11.8% | 0.11 | 1.23 | 1.5% |
| FY2025 | ₹0Cr | ₹0Cr | 13.7% | 0.37 | 1.30 | 6.5% |
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.