DuPont Decomposition
Why does RADICO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.2% = 10.0% × 1.22 × 1.50
Latest: FY2026
Profitability
Net Margin
10.0%
9.3% →10.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.22x
1.02x →1.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.37x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.2 pp over 5 years. Driven by asset turnover improving (1.02x → 1.22x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.3% | 1.02 | 1.37 | 13.0% |
| FY2023 | ₹0Cr | ₹0Cr | 7.1% | 0.83 | 1.68 | 10.0% |
| FY2024 | ₹0Cr | ₹0Cr | 6.4% | 1.00 | 1.68 | 10.8% |
| FY2025 | ₹0Cr | ₹0Cr | 7.1% | 1.05 | 1.68 | 12.6% |
| FY2026 | ₹0Cr | ₹0Cr | 10.0% | 1.22 | 1.50 | 18.2% |
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.