DuPont Decomposition
Why does RACLGEAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.5% = 5.7% × 0.65 × 2.81
Latest: FY2025
Profitability
Net Margin
5.7%
9.3% →5.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.65x
0.73x →0.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.81x
2.67x →2.81x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.7 pp over 4 years. Driven by net margin declining (9.3% → 5.7%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.3% | 0.73 | 2.67 | 18.2% |
| FY2023 | ₹0Cr | ₹0Cr | 11.1% | 0.76 | 2.65 | 22.4% |
| FY2024 | ₹0Cr | ₹0Cr | 9.6% | 0.71 | 2.83 | 19.2% |
| FY2025 | ₹0Cr | ₹0Cr | 5.7% | 0.65 | 2.81 | 10.5% |
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.