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
16.4% = 11.9% × 1.06 × 1.31
Latest: FY2025
Profitability
Net Margin
11.9%
5.9% →11.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.06x
0.29x →1.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.31x
1.58x →1.31x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.7 pp over 3 years. Driven by net margin improving (5.9% → 11.9%), asset turnover improving (0.29x → 1.06x), leverage falling (1.58x → 1.31x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.9% | 0.29 | 1.58 | 2.7% |
| FY2024 | ₹0Cr | ₹0Cr | 18.2% | 0.29 | 1.45 | 7.6% |
| FY2025 | ₹0Cr | ₹0Cr | 11.9% | 1.06 | 1.31 | 16.4% |
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.