DuPont Decomposition
Why does RAIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.6% = 0.3% × 0.81 × 2.79
Latest: FY2026
Profitability
Net Margin
0.3%
6.9% →0.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
0.94x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.79x
2.63x →2.79x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 16.5 pp over 4 years. Driven by net margin declining (6.9% → 0.2%), asset turnover declining (0.94x → 0.81x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.9% | 0.94 | 2.63 | 17.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -5.2% | 0.90 | 2.73 | -12.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -3.7% | 0.81 | 2.85 | -8.5% |
| FY2026 | ₹0Cr | ₹0Cr | 0.3% | 0.81 | 2.79 | 0.6% |
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.