DuPont Decomposition
Why does PSPPROJECT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.7% = 2.3% × 1.06 × 1.95
Latest: FY2025
Profitability
Net Margin
2.3%
6.3% →2.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.06x
0.41x →1.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.95x
2.20x →1.95x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.1 pp over 3 years. Driven by net margin declining (6.3% → 2.3%), asset turnover improving (0.41x → 1.06x), leverage falling (2.20x → 1.95x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 0.41 | 2.20 | 5.7% |
| FY2024 | ₹0Cr | ₹0Cr | 2.3% | 0.33 | 2.23 | 1.7% |
| FY2025 | ₹0Cr | ₹0Cr | 2.3% | 1.06 | 1.95 | 4.7% |
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.