DuPont Decomposition
Why does PATELRMART earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.8% = 3.1% × 2.12 × 2.84
Latest: FY2025
Profitability
Net Margin
3.1%
1.6% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.12x
3.33x →2.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.84x
4.22x →2.84x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.0 pp over 3 years. Driven by net margin improving (1.6% → 3.1%), asset turnover declining (3.33x → 2.12x), leverage falling (4.22x → 2.84x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.6% | 3.33 | 4.22 | 22.8% |
| FY2024 | ₹0Cr | ₹0Cr | 2.8% | 2.41 | 3.53 | 23.9% |
| FY2025 | ₹0Cr | ₹0Cr | 3.1% | 2.12 | 2.84 | 18.8% |
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.