DuPont Decomposition
Why does UPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.5% = 3.7% × 0.54 × 2.74
Latest: FY2026
Profitability
Net Margin
3.7%
7.9% →3.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.54x
0.56x →0.54x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.74x
3.35x →2.74x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.2 pp over 5 years. Driven by net margin declining (7.9% → 3.7%), leverage falling (3.35x → 2.74x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.9% | 0.56 | 3.35 | 14.7% |
| FY2023 | ₹0Cr | ₹0Cr | 6.7% | 0.60 | 2.97 | 12.0% |
| FY2024 | ₹0Cr | ₹-0Cr | -2.8% | 0.49 | 3.15 | -4.3% |
| FY2025 | ₹0Cr | ₹0Cr | 1.9% | 0.53 | 2.73 | 2.8% |
| FY2026 | ₹0Cr | ₹0Cr | 3.7% | 0.54 | 2.74 | 5.5% |
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.