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
20.8% = 11.9% × 1.11 × 1.58
Latest: FY2025
Profitability
Net Margin
11.9%
14.8% →11.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.11x
0.30x →1.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.58x
1.40x →1.58x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.5 pp over 3 years. Driven by net margin declining (14.8% → 11.9%), asset turnover improving (0.30x → 1.11x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.8% | 0.30 | 1.40 | 6.3% |
| FY2024 | ₹0Cr | ₹0Cr | 13.4% | 0.30 | 1.59 | 6.4% |
| FY2025 | ₹0Cr | ₹0Cr | 11.9% | 1.11 | 1.58 | 20.8% |
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.