DuPont Decomposition
Why does PTCIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.7% = 16.9% × 0.31 × 1.30
Latest: FY2026
Profitability
Net Margin
16.9%
7.3% →16.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.41x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.30x
2.53x →1.30x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~7%. Driven by net margin improving (7.3% → 16.9%), leverage falling (2.53x → 1.30x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.3% | 0.41 | 2.53 | 7.6% |
| FY2023 | ₹0Cr | ₹0Cr | 12.0% | 0.39 | 1.80 | 8.4% |
| FY2024 | ₹0Cr | ₹0Cr | 16.8% | 0.28 | 1.39 | 6.5% |
| FY2025 | ₹0Cr | ₹0Cr | 19.8% | 0.19 | 1.14 | 4.4% |
| FY2026 | ₹0Cr | ₹0Cr | 16.9% | 0.31 | 1.30 | 6.7% |
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.