DuPont Decomposition
Why does POWERGRID earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.8% = 35.2% × 0.17 × 2.87
Latest: FY2025
Profitability
Net Margin
35.2%
35.2% →35.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.17x
0.05x →0.17x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.87x
3.02x →2.87x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.6 pp over 3 years. Driven by asset turnover improving (0.05x → 0.17x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 35.2% | 0.05 | 3.02 | 5.2% |
| FY2024 | ₹0Cr | ₹0Cr | 34.8% | 0.05 | 2.88 | 4.8% |
| FY2025 | ₹0Cr | ₹0Cr | 35.2% | 0.17 | 2.87 | 16.8% |
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.