DuPont Decomposition
Why does RAMAPHO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.5% = 5.9% × 1.24 × 1.70
Latest: FY2026
Profitability
Net Margin
5.9%
14.3% →5.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.24x
1.11x →1.24x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.70x
1.64x →1.70x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.5 pp over 5 years. Driven by net margin declining (14.3% → 5.9%), asset turnover improving (1.11x → 1.24x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.3% | 1.11 | 1.64 | 26.0% |
| FY2023 | ₹0Cr | ₹0Cr | 7.2% | 1.07 | 1.73 | 13.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -7.2% | 0.69 | 1.77 | -8.8% |
| FY2025 | ₹0Cr | ₹0Cr | 1.8% | 1.17 | 1.71 | 3.7% |
| FY2026 | ₹0Cr | ₹0Cr | 5.9% | 1.24 | 1.70 | 12.5% |
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.