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
4.4% = 1.8% × 1.01 × 2.44
Latest: FY2026
Profitability
Net Margin
1.8%
9.6% →1.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
1.37x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.44x
1.85x →2.44x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 19.9 pp over 5 years. Driven by net margin declining (9.6% → 1.8%), asset turnover declining (1.37x → 1.01x), leverage rising (1.85x → 2.44x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.6% | 1.37 | 1.85 | 24.3% |
| FY2023 | ₹0Cr | ₹0Cr | 6.8% | 1.09 | 2.20 | 16.5% |
| FY2024 | ₹0Cr | ₹0Cr | 4.9% | 1.22 | 2.23 | 13.4% |
| FY2025 | ₹0Cr | ₹0Cr | 2.3% | 1.06 | 1.95 | 4.7% |
| FY2026 | ₹0Cr | ₹0Cr | 1.8% | 1.01 | 2.44 | 4.4% |
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.