DuPont Decomposition
Why does POWERMECH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.0% = 6.3% × 1.13 × 2.11
Latest: FY2025
Profitability
Net Margin
6.3%
6.3% →6.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.13x
0.38x →1.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.11x
2.39x →2.11x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.1 pp over 3 years. Driven by asset turnover improving (0.38x → 1.13x), leverage falling (2.39x → 2.11x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 0.38 | 2.39 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 6.5% | 0.36 | 1.94 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 6.3% | 1.13 | 2.11 | 15.0% |
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.