DuPont Decomposition
Why does PREMEXPLN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.7% = 6.9% × 0.79 × 2.15
Latest: FY2025
Profitability
Net Margin
6.9%
2.7% →6.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
0.62x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.15x
1.70x →2.15x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.9 pp over 4 years. Driven by net margin improving (2.7% → 6.9%), asset turnover improving (0.62x → 0.79x), leverage rising (1.70x → 2.15x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.7% | 0.62 | 1.70 | 2.8% |
| FY2023 | ₹0Cr | ₹0Cr | 3.4% | 0.57 | 1.83 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 10.5% | 0.61 | 2.01 | 12.9% |
| FY2025 | ₹0Cr | ₹0Cr | 6.9% | 0.79 | 2.15 | 11.7% |
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.