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
14.4% = 6.0% × 1.08 × 2.22
Latest: FY2026
Profitability
Net Margin
6.0%
5.1% →6.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.08x
1.04x →1.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.22x
2.49x →2.22x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.1 pp over 5 years. Driven by leverage falling (2.49x → 2.22x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.1% | 1.04 | 2.49 | 13.3% |
| FY2023 | ₹0Cr | ₹0Cr | 5.8% | 1.18 | 2.39 | 16.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.9% | 1.18 | 1.94 | 13.5% |
| FY2025 | ₹0Cr | ₹0Cr | 6.2% | 1.13 | 2.14 | 15.1% |
| FY2026 | ₹0Cr | ₹0Cr | 6.0% | 1.08 | 2.22 | 14.4% |
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.