DuPont Decomposition
Why does PNB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.3% = 29.4% × 0.03 × 13.56
Latest: FY2026
Profitability
Net Margin
29.4%
9.4% →29.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.03x
0.03x →0.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
13.56x
13.72x →13.56x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.3 pp over 5 years. Driven by net margin improving (9.4% → 29.4%). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.4% | 0.03 | 13.72 | 4.0% |
| FY2023 | ₹0Cr | ₹0Cr | 7.1% | 0.03 | 14.52 | 3.3% |
| FY2024 | ₹0Cr | ₹0Cr | 16.5% | 0.03 | 14.48 | 8.3% |
| FY2025 | ₹0Cr | ₹0Cr | 30.9% | 0.03 | 13.95 | 13.9% |
| FY2026 | ₹0Cr | ₹0Cr | 29.4% | 0.03 | 13.56 | 12.3% |
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.