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
-18.5% = -10.7% × 0.41 × 4.17
Latest: FY2025
Profitability
Net Margin
-10.7%
4.1% →-10.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.41x
0.68x →0.41x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.17x
269.41x →4.17x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 774.8 pp over 3 years. Driven by net margin declining (4.1% → -10.7%), asset turnover declining (0.68x → 0.41x), leverage falling (269.41x → 4.17x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.1% | 0.68 | 269.41 | 756.4% |
| FY2024 | ₹0Cr | ₹-0Cr | -2.0% | 0.55 | 13.81 | -15.6% |
| FY2025 | ₹0Cr | ₹-0Cr | -10.7% | 0.41 | 4.17 | -18.5% |
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.