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
20.4% = 9.2% × 1.60 × 1.39
Latest: FY2025
Profitability
Net Margin
9.2%
9.1% →9.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.60x
1.48x →1.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.39x
1.42x →1.39x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.2 pp over 3 years. Driven by asset turnover improving (1.48x → 1.60x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.1% | 1.48 | 1.42 | 19.2% |
| FY2024 | ₹0Cr | ₹0Cr | 10.1% | 1.47 | 1.48 | 21.8% |
| FY2025 | ₹0Cr | ₹0Cr | 9.2% | 1.60 | 1.39 | 20.4% |
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.