DuPont Decomposition
Why does PFC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.5% = 59.9% × 0.03 × 9.37
Latest: FY2026
Profitability
Net Margin
59.9%
46.4% →59.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.03x
0.04x →0.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.37x
11.04x →9.37x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~19%. Driven by net margin improving (46.4% → 59.9%), leverage falling (11.04x → 9.37x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 46.4% | 0.04 | 11.04 | 19.6% |
| FY2023 | ₹0Cr | ₹0Cr | 57.7% | 0.03 | 10.65 | 18.9% |
| FY2024 | ₹0Cr | ₹0Cr | 58.9% | 0.03 | 10.27 | 19.5% |
| FY2025 | ₹0Cr | ₹0Cr | 55.0% | 0.04 | 10.01 | 19.5% |
| FY2026 | ₹0Cr | ₹0Cr | 59.9% | 0.03 | 9.37 | 19.5% |
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.