DuPont Decomposition
Why does ULTRACEMCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.2% = 8.1% × 0.56 × 1.81
Latest: FY2025
Profitability
Net Margin
8.1%
8.9% →8.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.56x
0.20x →0.56x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.81x
1.68x →1.81x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.1 pp over 3 years. Driven by asset turnover improving (0.20x → 0.56x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.9% | 0.20 | 1.68 | 3.1% |
| FY2024 | ₹0Cr | ₹0Cr | 11.4% | 0.20 | 1.64 | 3.8% |
| FY2025 | ₹0Cr | ₹0Cr | 8.1% | 0.56 | 1.81 | 8.2% |
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.