DuPont Decomposition
Why does PHOENIXLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.1% = 26.5% × 0.17 × 1.55
Latest: FY2025
Profitability
Net Margin
26.5%
40.1% →26.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.17x
0.04x →0.17x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
2.10x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.6 pp over 3 years. Driven by net margin declining (40.1% → 26.5%), asset turnover improving (0.04x → 0.17x), leverage falling (2.10x → 1.55x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 40.1% | 0.04 | 2.10 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 30.0% | 0.07 | 2.04 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 26.5% | 0.17 | 1.55 | 7.1% |
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.