DuPont Decomposition
Why does POLYCAB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.3% = 9.4% × 1.38 × 1.71
Latest: FY2026
Profitability
Net Margin
9.4%
7.6% →9.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.38x
1.62x →1.38x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.71x
1.34x →1.71x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.9 pp over 5 years. Driven by net margin improving (7.6% → 9.4%), asset turnover declining (1.62x → 1.38x), leverage rising (1.34x → 1.71x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.6% | 1.62 | 1.34 | 16.4% |
| FY2023 | ₹0Cr | ₹0Cr | 9.1% | 1.48 | 1.42 | 19.1% |
| FY2024 | ₹0Cr | ₹0Cr | 10.1% | 1.47 | 1.48 | 21.8% |
| FY2025 | ₹0Cr | ₹0Cr | 9.2% | 1.60 | 1.40 | 20.6% |
| FY2026 | ₹0Cr | ₹0Cr | 9.4% | 1.38 | 1.71 | 22.3% |
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.