DuPont Decomposition
Why does PRAJIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.8% = 6.9% × 1.01 × 2.29
Latest: FY2025
Profitability
Net Margin
6.9%
8.8% →6.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
0.38x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.29x
2.43x →2.29x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.7 pp over 3 years. Driven by net margin declining (8.8% → 6.9%), asset turnover improving (0.38x → 1.01x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.8% | 0.38 | 2.43 | 8.2% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 0.35 | 2.27 | 7.2% |
| FY2025 | ₹0Cr | ₹0Cr | 6.9% | 1.01 | 2.29 | 15.8% |
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.