DuPont Decomposition
Why does RAMASTEEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.3% = 2.2% × 1.37 × 2.08
Latest: FY2025
Profitability
Net Margin
2.2%
3.6% →2.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.37x
2.12x →1.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.08x
2.83x →2.08x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.3 pp over 4 years. Driven by net margin declining (3.6% → 2.2%), asset turnover declining (2.12x → 1.37x), leverage falling (2.83x → 2.08x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.6% | 2.12 | 2.83 | 21.6% |
| FY2023 | ₹0Cr | ₹0Cr | 2.0% | 1.91 | 2.78 | 10.7% |
| FY2024 | ₹0Cr | ₹0Cr | 2.8% | 1.41 | 2.19 | 8.7% |
| FY2025 | ₹0Cr | ₹0Cr | 2.2% | 1.37 | 2.08 | 6.3% |
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.