DuPont Decomposition
Why does RALLIS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.6% = 4.7% × 0.89 × 1.56
Latest: FY2025
Profitability
Net Margin
4.7%
-13.2% →4.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.89x
0.19x →0.89x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.56x
1.62x →1.56x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.6 pp over 3 years. Driven by net margin improving (-13.2% → 4.7%), asset turnover improving (0.19x → 0.89x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -13.2% | 0.19 | 1.62 | -4.0% |
| FY2024 | ₹0Cr | ₹-0Cr | -4.8% | 0.15 | 1.64 | -1.1% |
| FY2025 | ₹0Cr | ₹0Cr | 4.7% | 0.89 | 1.56 | 6.6% |
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.