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
10.2% = 6.0% × 0.94 × 1.81
Latest: FY2025
Profitability
Net Margin
6.0%
3.6% →6.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.94x
1.43x →0.94x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.81x
3.81x →1.81x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.4 pp over 3 years. Driven by net margin improving (3.6% → 6.0%), asset turnover declining (1.43x → 0.94x), leverage falling (3.81x → 1.81x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 1.43 | 3.81 | 19.6% |
| FY2024 | ₹0Cr | ₹0Cr | 4.9% | 1.19 | 2.22 | 13.0% |
| FY2025 | ₹0Cr | ₹0Cr | 6.0% | 0.94 | 1.81 | 10.2% |
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.