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
12.0% = 6.0% × 0.94 × 2.13
Latest: FY2026
Profitability
Net Margin
6.0%
-13.8% →6.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.94x
0.61x →0.94x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.13x
1.51x →2.13x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 24.6 pp over 5 years. Driven by net margin improving (-13.8% → 6.0%), asset turnover improving (0.61x → 0.94x), leverage rising (1.51x → 2.13x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -13.8% | 0.61 | 1.51 | -12.6% |
| FY2023 | ₹0Cr | ₹-0Cr | -42.0% | 0.53 | 1.75 | -38.8% |
| FY2024 | ₹0Cr | ₹-0Cr | -46.0% | 0.79 | 2.15 | -77.7% |
| FY2025 | ₹0Cr | ₹-0Cr | -5.8% | 0.88 | 2.12 | -10.8% |
| FY2026 | ₹0Cr | ₹0Cr | 6.0% | 0.94 | 2.13 | 12.0% |
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.