DuPont Decomposition
Why does PETRONET earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.0% = 7.8% × 1.86 × 1.37
Latest: FY2025
Profitability
Net Margin
7.8%
4.7% →7.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.86x
0.61x →1.86x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.37x
1.49x →1.37x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 15.8 pp over 3 years. Driven by net margin improving (4.7% → 7.8%), asset turnover improving (0.61x → 1.86x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 0.61 | 1.49 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 5.5% | 0.54 | 1.47 | 4.4% |
| FY2025 | ₹0Cr | ₹0Cr | 7.8% | 1.86 | 1.37 | 20.0% |
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.