DuPont Decomposition
Why does PAVNAIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.5% = 2.4% × 1.11 × 1.31
Latest: FY2025
Profitability
Net Margin
2.4%
2.5% →2.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.11x
1.31x →1.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.31x
3.63x →1.31x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.5 pp over 4 years. Driven by asset turnover declining (1.31x → 1.11x), leverage falling (3.63x → 1.31x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.5% | 1.31 | 3.63 | 12.0% |
| FY2023 | ₹0Cr | ₹0Cr | 2.3% | 1.30 | 3.76 | 11.3% |
| FY2024 | ₹0Cr | ₹0Cr | 3.3% | 1.23 | 3.04 | 12.5% |
| FY2025 | ₹0Cr | ₹0Cr | 2.4% | 1.11 | 1.31 | 3.5% |
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.