DuPont Decomposition
Why does LTTS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.8% = 11.6% × 1.05 × 1.62
Latest: FY2026
Profitability
Net Margin
11.6%
13.8% →11.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
1.08x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.62x
1.85x →1.62x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.6 pp over 4 years. Driven by net margin declining (13.8% → 11.6%), leverage falling (1.85x → 1.62x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.8% | 1.08 | 1.85 | 27.3% |
| FY2024 | ₹0Cr | ₹0Cr | 13.5% | 1.14 | 1.59 | 24.5% |
| FY2025 | ₹0Cr | ₹0Cr | 13.1% | 1.00 | 1.59 | 20.8% |
| FY2026 | ₹0Cr | ₹0Cr | 11.6% | 1.05 | 1.62 | 19.8% |
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.