DuPont Decomposition
Why does RATNAMANI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.8% = 10.6% × 1.05 × 1.34
Latest: FY2025
Profitability
Net Margin
10.6%
12.8% →10.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
0.40x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.45x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.4 pp over 3 years. Driven by net margin declining (12.8% → 10.6%), asset turnover improving (0.40x → 1.05x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.8% | 0.40 | 1.45 | 7.4% |
| FY2024 | ₹0Cr | ₹0Cr | 12.9% | 0.37 | 1.28 | 6.2% |
| FY2025 | ₹0Cr | ₹0Cr | 10.6% | 1.05 | 1.34 | 14.8% |
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.