DuPont Decomposition
Why does PGEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.5% = 3.7% × 0.89 × 1.95
Latest: FY2026
Profitability
Net Margin
3.7%
3.4% →3.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.89x
1.02x →0.89x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.95x
3.42x →1.95x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.5 pp over 5 years. Driven by asset turnover declining (1.02x → 0.89x), leverage falling (3.42x → 1.95x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.4% | 1.02 | 3.42 | 12.0% |
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 1.41 | 3.81 | 19.6% |
| FY2024 | ₹0Cr | ₹0Cr | 5.0% | 1.17 | 2.22 | 13.0% |
| FY2025 | ₹0Cr | ₹0Cr | 5.9% | 0.95 | 1.81 | 10.2% |
| FY2026 | ₹0Cr | ₹0Cr | 3.7% | 0.89 | 1.95 | 6.5% |
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.