DuPont Decomposition
Why does PGHL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.1% = 5.9% × 0.36 × 1.48
Latest: FY2025
Profitability
Net Margin
5.9%
13.9% →5.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.36x
0.33x →0.36x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.48x
1.45x →1.48x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.6 pp over 3 years. Driven by net margin declining (13.9% → 5.9%).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.9% | 0.33 | 1.45 | 6.7% |
| FY2024 | ₹0Cr | ₹0Cr | 9.9% | 0.27 | 1.47 | 4.0% |
| FY2025 | ₹0Cr | ₹0Cr | 5.9% | 0.36 | 1.48 | 3.1% |
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.