DuPont Decomposition
Why does UCAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-4.6% = -2.0% × 0.95 × 2.37
Latest: FY2025
Profitability
Net Margin
-2.0%
4.5% →-2.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
1.00x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.37x
1.99x →2.37x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.5 pp over 4 years. Driven by net margin declining (4.5% → -2.0%), leverage rising (1.99x → 2.37x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.5% | 1.00 | 1.99 | 8.9% |
| FY2023 | ₹0Cr | ₹0Cr | 0.1% | 1.05 | 1.99 | 0.2% |
| FY2024 | ₹0Cr | ₹-0Cr | -3.5% | 0.90 | 2.16 | -6.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -2.0% | 0.95 | 2.37 | -4.6% |
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.