DuPont Decomposition
Why does RATNAVEER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.6% = 5.3% × 1.20 × 2.01
Latest: FY2025
Profitability
Net Margin
5.3%
2.2% →5.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.20x
1.38x →1.20x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.01x
4.68x →2.01x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.7 pp over 4 years. Driven by net margin improving (2.2% → 5.2%), asset turnover declining (1.38x → 1.20x), leverage falling (4.68x → 2.01x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.2% | 1.38 | 4.68 | 14.4% |
| FY2023 | ₹0Cr | ₹0Cr | 5.2% | 1.23 | 3.67 | 23.6% |
| FY2024 | ₹0Cr | ₹0Cr | 4.0% | 0.28 | 2.05 | 2.2% |
| FY2025 | ₹0Cr | ₹0Cr | 5.3% | 1.20 | 2.01 | 12.6% |
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.