DuPont Decomposition
Why does PUNJABCHEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.7% = 4.4% × 1.10 × 2.20
Latest: FY2025
Profitability
Net Margin
4.4%
1.6% →4.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.10x
0.32x →1.10x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.20x
2.20x →2.20x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.5 pp over 3 years. Driven by net margin improving (1.6% → 4.4%), asset turnover improving (0.32x → 1.10x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.6% | 0.32 | 2.20 | 1.1% |
| FY2024 | ₹0Cr | ₹0Cr | 1.2% | 0.31 | 1.94 | 0.7% |
| FY2025 | ₹0Cr | ₹0Cr | 4.4% | 1.10 | 2.20 | 10.7% |
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.