DuPont Decomposition
Why does RAMCOSYS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-10.7% = -5.8% × 0.88 × 2.09
Latest: FY2025
Profitability
Net Margin
-5.8%
-36.0% →-5.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.88x
0.14x →0.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.09x
1.75x →2.09x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.2 pp over 3 years. Driven by net margin improving (-36.0% → -5.8%), asset turnover improving (0.14x → 0.88x), leverage rising (1.75x → 2.09x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -36.0% | 0.14 | 1.75 | -8.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -17.5% | 0.20 | 2.15 | -7.4% |
| FY2025 | ₹0Cr | ₹-0Cr | -5.8% | 0.88 | 2.09 | -10.7% |
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.