DuPont Decomposition
Why does PPLPHARMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.1% = 1.0% × 0.58 × 1.93
Latest: FY2025
Profitability
Net Margin
1.0%
5.8% →1.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.58x
0.51x →0.58x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.93x
1.91x →1.93x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.5 pp over 4 years. Driven by net margin declining (5.8% → 1.0%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.8% | 0.51 | 1.91 | 5.6% |
| FY2023 | ₹0Cr | ₹0Cr | 2.3% | 0.15 | 2.14 | 0.7% |
| FY2024 | ₹0Cr | ₹0Cr | 4.0% | 0.17 | 1.94 | 1.3% |
| FY2025 | ₹0Cr | ₹0Cr | 1.0% | 0.58 | 1.93 | 1.1% |
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.