DuPont Decomposition
Why does PSB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.3% = 23.6% × 0.03 × 12.69
Latest: FY2026
Profitability
Net Margin
23.6%
28.4% →23.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.03x
0.03x →0.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
12.69x
8.64x →12.69x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.9 pp over 5 years. Driven by net margin declining (28.4% → 23.6%), leverage rising (8.64x → 12.69x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 28.4% | 0.03 | 8.64 | 7.4% |
| FY2023 | ₹0Cr | ₹0Cr | 33.8% | 0.03 | 9.03 | 8.7% |
| FY2024 | ₹0Cr | ₹0Cr | 16.1% | 0.03 | 9.51 | 3.8% |
| FY2025 | ₹0Cr | ₹0Cr | 19.0% | 0.03 | 12.12 | 7.6% |
| FY2026 | ₹0Cr | ₹0Cr | 23.6% | 0.03 | 12.69 | 9.3% |
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.