DuPont Decomposition
Why does PRECAM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.1% = 6.6% × 0.74 × 1.26
Latest: FY2026
Profitability
Net Margin
6.6%
5.3% →6.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.74x
0.83x →0.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.26x
1.55x →1.26x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~6%. Driven by net margin improving (5.3% → 6.6%), leverage falling (1.55x → 1.26x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.3% | 0.83 | 1.55 | 6.8% |
| FY2023 | ₹0Cr | ₹0Cr | 4.3% | 0.96 | 1.55 | 6.5% |
| FY2024 | ₹0Cr | ₹0Cr | 4.0% | 0.97 | 1.39 | 5.4% |
| FY2025 | ₹0Cr | ₹0Cr | 6.3% | 0.80 | 1.37 | 6.8% |
| FY2026 | ₹0Cr | ₹0Cr | 6.6% | 0.74 | 1.26 | 6.1% |
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.