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
2.3% = 1.6% × 0.80 × 1.82
Latest: FY2026
Profitability
Net Margin
1.6%
2.5% →1.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.80x
1.31x →0.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.82x
4.44x →1.82x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.4 pp over 5 years. Driven by asset turnover declining (1.31x → 0.80x), leverage falling (4.44x → 1.82x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.5% | 1.31 | 4.44 | 14.7% |
| FY2023 | ₹0Cr | ₹0Cr | 2.3% | 1.30 | 4.52 | 13.6% |
| FY2024 | ₹0Cr | ₹0Cr | 3.3% | 1.23 | 3.53 | 14.5% |
| FY2025 | ₹0Cr | ₹0Cr | 2.4% | 1.11 | 1.40 | 3.7% |
| FY2026 | ₹0Cr | ₹0Cr | 1.6% | 0.80 | 1.82 | 2.3% |
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.