DuPont Decomposition
Why does PURVA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-10.4% = -9.3% × 0.14 × 8.21
Latest: FY2025
Profitability
Net Margin
-9.3%
14.7% →-9.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.14x
0.04x →0.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
8.21x
3.58x →8.21x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.4 pp over 3 years. Driven by net margin declining (14.7% → -9.3%), leverage rising (3.58x → 8.21x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.7% | 0.04 | 3.58 | 2.0% |
| FY2024 | ₹0Cr | ₹0Cr | 1.5% | 0.06 | 4.48 | 0.4% |
| FY2025 | ₹0Cr | ₹-0Cr | -9.3% | 0.14 | 8.21 | -10.4% |
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.