DuPont Decomposition
Why does RANEHOLDIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.4% = 4.8% × 1.21 × 2.64
Latest: FY2025
Profitability
Net Margin
4.8%
-0.9% →4.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.21x
0.36x →1.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.64x
3.21x →2.64x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.4 pp over 3 years. Driven by net margin improving (-0.9% → 4.8%), asset turnover improving (0.36x → 1.21x), leverage falling (3.21x → 2.64x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -0.9% | 0.36 | 3.21 | -1.0% |
| FY2024 | ₹0Cr | ₹0Cr | 42.8% | 0.04 | 1.03 | 1.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.8% | 1.21 | 2.64 | 15.4% |
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.