DuPont Decomposition
Why does PDMJEPAPER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.0% = 11.6% × 0.88 × 1.37
Latest: FY2026
Profitability
Net Margin
11.6%
6.2% →11.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.88x
0.93x →0.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.37x
1.74x →1.37x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.9 pp over 5 years. Driven by net margin improving (6.2% → 11.6%), leverage falling (1.74x → 1.37x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.2% | 0.93 | 1.74 | 10.1% |
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 1.21 | 1.58 | 15.0% |
| FY2024 | ₹0Cr | ₹0Cr | 12.6% | 1.09 | 1.45 | 19.9% |
| FY2025 | ₹0Cr | ₹0Cr | 11.8% | 1.06 | 1.31 | 16.4% |
| FY2026 | ₹0Cr | ₹0Cr | 11.6% | 0.88 | 1.37 | 14.0% |
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.