DuPont Decomposition
Why does IRCTC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
32.3% = 26.7% × 0.69 × 1.76
Latest: FY2026
Profitability
Net Margin
26.7%
35.1% →26.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.69x
0.48x →0.69x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.76x
2.08x →1.76x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.9 pp over 5 years. Driven by net margin declining (35.1% → 26.7%), asset turnover improving (0.48x → 0.69x), leverage falling (2.08x → 1.76x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 35.1% | 0.48 | 2.08 | 35.3% |
| FY2023 | ₹0Cr | ₹0Cr | 28.4% | 0.70 | 2.05 | 40.6% |
| FY2024 | ₹0Cr | ₹0Cr | 26.1% | 0.70 | 1.89 | 34.4% |
| FY2025 | ₹0Cr | ₹0Cr | 28.1% | 0.69 | 1.86 | 35.9% |
| FY2026 | ₹0Cr | ₹0Cr | 26.7% | 0.69 | 1.76 | 32.3% |
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.