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
3.7% = 2.7% × 0.81 × 1.71
Latest: FY2025
Profitability
Net Margin
2.7%
14.3% →2.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
1.11x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.71x
1.64x →1.71x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 22.3 pp over 4 years. Driven by net margin declining (14.3% → 2.7%), asset turnover declining (1.11x → 0.81x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.3% | 1.11 | 1.64 | 26.0% |
| FY2023 | ₹0Cr | ₹0Cr | 1.5% | 0.45 | 1.73 | 1.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -1.3% | 0.30 | 1.77 | -0.7% |
| FY2025 | ₹0Cr | ₹0Cr | 2.7% | 0.81 | 1.71 | 3.7% |
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.