DuPont Decomposition
Why does PETRONET earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.6% = 9.0% × 1.59 × 1.23
Latest: FY2026
Profitability
Net Margin
9.0%
8.1% →9.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.59x
2.00x →1.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.23x
1.56x →1.23x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.6 pp over 5 years. Driven by asset turnover declining (2.00x → 1.59x), leverage falling (1.56x → 1.23x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.1% | 2.00 | 1.56 | 25.1% |
| FY2023 | ₹0Cr | ₹0Cr | 5.6% | 2.58 | 1.49 | 21.8% |
| FY2024 | ₹0Cr | ₹0Cr | 7.0% | 2.03 | 1.47 | 21.0% |
| FY2025 | ₹0Cr | ₹0Cr | 7.8% | 1.87 | 1.37 | 20.0% |
| FY2026 | ₹0Cr | ₹0Cr | 9.0% | 1.59 | 1.23 | 17.6% |
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.