DuPont Decomposition
Why does RAILTEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.0% = 8.7% × 0.67 × 2.58
Latest: FY2025
Profitability
Net Margin
8.7%
9.7% →8.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.67x
0.58x →0.67x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.58x
2.03x →2.58x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.6 pp over 3 years. Driven by leverage rising (2.03x → 2.58x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.7% | 0.58 | 2.03 | 11.4% |
| FY2024 | ₹0Cr | ₹0Cr | 9.6% | 0.63 | 2.22 | 13.5% |
| FY2025 | ₹0Cr | ₹0Cr | 8.7% | 0.67 | 2.58 | 15.0% |
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.