DuPont Decomposition
Why does PRUDENT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
29.3% = 17.9% × 1.16 × 1.41
Latest: FY2025
Profitability
Net Margin
17.9%
23.3% →17.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.16x
0.34x →1.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.41x
1.49x →1.41x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 17.5 pp over 3 years. Driven by net margin declining (23.3% → 17.9%), asset turnover improving (0.34x → 1.16x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 23.3% | 0.34 | 1.49 | 11.8% |
| FY2024 | ₹0Cr | ₹0Cr | 18.6% | 0.32 | 1.57 | 9.3% |
| FY2025 | ₹0Cr | ₹0Cr | 17.9% | 1.16 | 1.41 | 29.3% |
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.