DuPont Decomposition
Why does POKARNA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
24.1% = 20.2% × 0.66 × 1.80
Latest: FY2025
Profitability
Net Margin
20.2%
12.0% →20.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.55x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.80x
2.65x →1.80x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.4 pp over 4 years. Driven by net margin improving (12.0% → 20.2%), asset turnover improving (0.55x → 0.66x), leverage falling (2.65x → 1.80x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.0% | 0.55 | 2.65 | 17.7% |
| FY2023 | ₹0Cr | ₹0Cr | 9.1% | 0.66 | 2.18 | 13.0% |
| FY2024 | ₹0Cr | ₹0Cr | 12.7% | 0.57 | 2.05 | 14.8% |
| FY2025 | ₹0Cr | ₹0Cr | 20.2% | 0.66 | 1.80 | 24.1% |
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.