DuPont Decomposition
Why does PCBL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.7% = 5.2% × 0.71 × 3.16
Latest: FY2025
Profitability
Net Margin
5.2%
7.4% →5.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.71x
0.25x →0.71x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.16x
1.92x →3.16x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.1 pp over 3 years. Driven by net margin declining (7.4% → 5.2%), asset turnover improving (0.25x → 0.71x), leverage rising (1.92x → 3.16x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.4% | 0.25 | 1.92 | 3.6% |
| FY2024 | ₹0Cr | ₹0Cr | 5.8% | 0.17 | 3.48 | 3.4% |
| FY2025 | ₹0Cr | ₹0Cr | 5.2% | 0.71 | 3.16 | 11.7% |
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.