DuPont Decomposition
Why does PGHH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.5% = 8.7% × 0.50 × 2.40
Latest: FY2025
Profitability
Net Margin
8.7%
5.5% →8.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.50x
0.46x →0.50x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.40x
2.28x →2.40x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.7 pp over 3 years. Driven by net margin improving (5.5% → 8.7%).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.5% | 0.46 | 2.28 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 17.7% | 0.40 | 2.26 | 16.0% |
| FY2025 | ₹0Cr | ₹0Cr | 8.7% | 0.50 | 2.40 | 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.