DuPont Decomposition
Why does PRAKASH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.7% = 8.8% × 0.90 × 1.35
Latest: FY2025
Profitability
Net Margin
8.8%
5.7% →8.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.90x
0.24x →0.90x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.35x
1.44x →1.35x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.8 pp over 3 years. Driven by net margin improving (5.7% → 8.8%), asset turnover improving (0.24x → 0.90x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.7% | 0.24 | 1.44 | 2.0% |
| FY2024 | ₹0Cr | ₹0Cr | 10.0% | 0.22 | 1.34 | 2.9% |
| FY2025 | ₹0Cr | ₹0Cr | 8.8% | 0.90 | 1.35 | 10.7% |
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.