DuPont Decomposition
Why does POWERGRID earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.8% = 34.1% × 0.16 × 2.93
Latest: FY2026
Profitability
Net Margin
34.1%
41.3% →34.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.16x
0.16x →0.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.93x
3.35x →2.93x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.2 pp over 5 years. Driven by net margin declining (41.2% → 34.1%), leverage falling (3.35x → 2.93x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 41.3% | 0.16 | 3.35 | 22.1% |
| FY2023 | ₹0Cr | ₹0Cr | 35.0% | 0.17 | 3.04 | 18.6% |
| FY2024 | ₹0Cr | ₹0Cr | 35.2% | 0.18 | 2.88 | 17.9% |
| FY2025 | ₹0Cr | ₹0Cr | 33.9% | 0.17 | 2.87 | 16.8% |
| FY2026 | ₹0Cr | ₹0Cr | 34.1% | 0.16 | 2.93 | 15.8% |
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.