DuPont Decomposition
Why does PFOCUS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.5% = 4.8% × 0.43 × 5.10
Latest: FY2026
Profitability
Net Margin
4.8%
-5.1% →4.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.43x
0.59x →0.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.10x
49.68x →5.10x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 160.6 pp over 5 years. Driven by net margin improving (-5.1% → 4.8%), asset turnover declining (0.59x → 0.43x), leverage falling (49.68x → 5.10x). 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 | -5.1% | 0.59 | 49.68 | -150.1% |
| FY2023 | ₹0Cr | ₹0Cr | 3.2% | 0.68 | 269.44 | 585.0% |
| FY2024 | ₹0Cr | ₹-0Cr | -10.3% | 0.55 | 13.81 | -78.4% |
| FY2025 | ₹0Cr | ₹-0Cr | -10.7% | 0.41 | 11.23 | -49.7% |
| FY2026 | ₹0Cr | ₹0Cr | 4.8% | 0.43 | 5.10 | 10.5% |
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.