DuPont Decomposition
Why does POONAWALLA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.2% = 8.3% × 0.11 × 5.82
Latest: FY2026
Profitability
Net Margin
8.3%
24.8% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.11x
0.09x →0.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.82x
2.72x →5.82x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~5%. Driven by net margin declining (24.8% → 8.3%), leverage rising (2.72x → 5.82x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 24.8% | 0.09 | 2.72 | 6.2% |
| FY2023 | ₹0Cr | ₹0Cr | 36.5% | 0.08 | 3.38 | 10.0% |
| FY2024 | ₹0Cr | ₹0Cr | 57.0% | 0.12 | 2.95 | 20.6% |
| FY2025 | ₹0Cr | ₹-0Cr | -2.4% | 0.12 | 4.29 | -1.2% |
| FY2026 | ₹0Cr | ₹0Cr | 8.3% | 0.11 | 5.82 | 5.2% |
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.