DuPont Decomposition
Why does POLYMED earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.2% = 20.5% × 0.52 × 1.15
Latest: FY2025
Profitability
Net Margin
20.5%
16.0% →20.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.52x
0.67x →0.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.15x
1.27x →1.15x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.2 pp over 4 years. Driven by net margin improving (16.0% → 20.5%), asset turnover declining (0.67x → 0.52x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.0% | 0.67 | 1.27 | 13.5% |
| FY2023 | ₹0Cr | ₹0Cr | 16.2% | 0.70 | 1.27 | 14.4% |
| FY2024 | ₹0Cr | ₹0Cr | 18.9% | 0.73 | 1.26 | 17.6% |
| FY2025 | ₹0Cr | ₹0Cr | 20.5% | 0.52 | 1.15 | 12.2% |
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.