DuPont Decomposition
Why does PIGL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.6% = 7.0% × 0.97 × 1.57
Latest: FY2025
Profitability
Net Margin
7.0%
3.2% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.97x
0.94x →0.97x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.57x
2.65x →1.57x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.7 pp over 4 years. Driven by net margin improving (3.2% → 7.0%), leverage falling (2.65x → 1.57x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.2% | 0.94 | 2.65 | 8.0% |
| FY2023 | ₹0Cr | ₹0Cr | 3.9% | 0.87 | 2.36 | 8.0% |
| FY2024 | ₹0Cr | ₹0Cr | 6.0% | 0.91 | 2.10 | 11.5% |
| FY2025 | ₹0Cr | ₹0Cr | 7.0% | 0.97 | 1.57 | 10.6% |
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.