DuPont Decomposition
Why does PROSTARM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
27.1% = 9.0% × 1.27 × 2.36
Latest: FY2024
Profitability
Net Margin
9.0%
6.7% →9.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.27x
1.75x →1.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.36x
2.24x →2.36x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.1 pp over 3 years. Driven by net margin improving (6.7% → 9.0%), asset turnover declining (1.75x → 1.27x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.7% | 1.75 | 2.24 | 26.0% |
| FY2023 | ₹0Cr | ₹0Cr | 8.7% | 1.48 | 2.46 | 31.6% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 1.27 | 2.36 | 27.1% |
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.