DuPont Decomposition
Why does LTF earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.3% = 27.3% × 0.08 × 4.70
Latest: FY2025
Profitability
Net Margin
27.3%
13.0% →27.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.08x
0.03x →0.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.70x
4.92x →4.70x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.4 pp over 3 years. Driven by net margin improving (13.0% → 27.3%), leverage falling (4.92x → 4.70x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.0% | 0.03 | 4.92 | 1.9% |
| FY2024 | ₹0Cr | ₹0Cr | 14.8% | 0.04 | 4.41 | 2.4% |
| FY2025 | ₹0Cr | ₹0Cr | 27.3% | 0.08 | 4.70 | 10.3% |
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.