DuPont Decomposition
Why does RBA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-25.9% = -6.6% × 0.83 × 4.69
Latest: FY2026
Profitability
Net Margin
-6.6%
-13.2% →-6.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
0.62x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.69x
2.29x →4.69x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.1 pp over 5 years. Driven by net margin improving (-13.2% → -6.6%), asset turnover improving (0.62x → 0.83x), leverage rising (2.29x → 4.69x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -13.2% | 0.62 | 2.29 | -18.8% |
| FY2023 | ₹0Cr | ₹-0Cr | -10.8% | 0.82 | 3.02 | -26.8% |
| FY2024 | ₹0Cr | ₹-0Cr | -9.0% | 0.89 | 4.32 | -34.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -8.5% | 0.74 | 3.81 | -23.8% |
| FY2026 | ₹0Cr | ₹-0Cr | -6.6% | 0.83 | 4.69 | -25.9% |
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.