DuPont Decomposition
Why does RACE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.4% = 0.7% × 3.04 × 2.55
Latest: FY2025
Profitability
Net Margin
0.7%
0.6% →0.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
3.04x
4.66x →3.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.55x
1.75x →2.55x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~5%. Driven by asset turnover declining (4.66x → 3.04x), leverage rising (1.75x → 2.55x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 0.6% | 4.66 | 1.75 | 4.8% |
| FY2023 | ₹0Cr | ₹0Cr | 0.5% | 5.47 | 2.39 | 6.3% |
| FY2024 | ₹0Cr | ₹0Cr | 0.5% | 4.19 | 3.74 | 7.0% |
| FY2025 | ₹0Cr | ₹0Cr | 0.7% | 3.04 | 2.55 | 5.4% |
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.