DuPont Decomposition
Why does PNBGILTS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.1% = 15.0% × 0.06 × 15.99
Latest: FY2025
Profitability
Net Margin
15.0%
4.3% →15.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.06x
0.01x →0.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
15.99x
17.06x →15.99x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.0 pp over 3 years. Driven by net margin improving (4.3% → 15.0%), leverage falling (17.06x → 15.99x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.3% | 0.01 | 17.06 | 1.1% |
| FY2024 | ₹0Cr | ₹0Cr | 14.4% | 0.02 | 18.45 | 5.1% |
| FY2025 | ₹0Cr | ₹0Cr | 15.0% | 0.06 | 15.99 | 15.1% |
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.