DuPont Decomposition
Why does RAMRAT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.5% = 2.1% × 2.60 × 3.44
Latest: FY2026
Profitability
Net Margin
2.1%
2.3% →2.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.60x
3.19x →2.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.44x
2.64x →3.44x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~18%. Driven by asset turnover declining (3.19x → 2.60x), leverage rising (2.64x → 3.44x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.3% | 3.19 | 2.64 | 19.2% |
| FY2023 | ₹0Cr | ₹0Cr | 1.7% | 3.18 | 2.66 | 14.4% |
| FY2024 | ₹0Cr | ₹0Cr | 1.9% | 3.13 | 2.23 | 13.2% |
| FY2025 | ₹0Cr | ₹0Cr | 1.9% | 2.83 | 2.69 | 14.5% |
| FY2026 | ₹0Cr | ₹0Cr | 2.1% | 2.60 | 3.44 | 18.5% |
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.