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
10.7% = 28.0% × 0.07 × 5.08
Latest: FY2026
Profitability
Net Margin
28.0%
8.8% →28.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.07x
0.11x →0.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.08x
5.36x →5.08x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.4 pp over 5 years. Driven by net margin improving (8.8% → 28.0%), leverage falling (5.36x → 5.08x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.8% | 0.11 | 5.36 | 5.3% |
| FY2023 | ₹0Cr | ₹0Cr | 24.9% | 0.06 | 4.94 | 7.5% |
| FY2024 | ₹0Cr | ₹0Cr | 29.5% | 0.08 | 4.38 | 9.9% |
| FY2025 | ₹0Cr | ₹0Cr | 27.3% | 0.08 | 4.71 | 10.3% |
| FY2026 | ₹0Cr | ₹0Cr | 28.0% | 0.07 | 5.08 | 10.7% |
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.