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
11.5% = 8.6% × 0.72 × 1.87
Latest: FY2026
Profitability
Net Margin
8.6%
6.7% →8.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.72x
1.75x →0.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.87x
2.39x →1.87x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 16.3 pp over 4 years. Driven by net margin improving (6.7% → 8.6%), asset turnover declining (1.75x → 0.72x), leverage falling (2.39x → 1.87x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.7% | 1.75 | 2.39 | 27.8% |
| FY2023 | ₹0Cr | ₹0Cr | 8.7% | 1.48 | 2.55 | 32.8% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 1.27 | 2.41 | 27.7% |
| FY2026 | ₹0Cr | ₹0Cr | 8.6% | 0.72 | 1.87 | 11.5% |
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.