DuPont Decomposition
Why does PONNIERODE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.6% = 5.4% × 0.62 × 1.09
Latest: FY2025
Profitability
Net Margin
5.4%
10.1% →5.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.62x
0.69x →0.62x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.09x
1.14x →1.09x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.3 pp over 4 years. Driven by net margin declining (10.1% → 5.4%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.1% | 0.69 | 1.14 | 7.9% |
| FY2023 | ₹0Cr | ₹0Cr | 8.8% | 0.85 | 1.14 | 8.5% |
| FY2024 | ₹0Cr | ₹0Cr | 11.1% | 0.70 | 1.10 | 8.5% |
| FY2025 | ₹0Cr | ₹0Cr | 5.4% | 0.62 | 1.09 | 3.6% |
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.