DuPont Decomposition
Why does RCF earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.3% = 2.3% × 1.11 × 3.26
Latest: FY2026
Profitability
Net Margin
2.3%
13.2% →2.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.11x
0.50x →1.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.26x
2.71x →3.26x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.7 pp over 5 years. Driven by net margin declining (13.2% → 2.3%), asset turnover improving (0.50x → 1.11x), leverage rising (2.71x → 3.26x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.2% | 0.50 | 2.71 | 18.1% |
| FY2023 | ₹0Cr | ₹0Cr | 12.4% | 0.81 | 2.11 | 21.1% |
| FY2024 | ₹0Cr | ₹0Cr | 3.5% | 0.56 | 2.49 | 4.9% |
| FY2025 | ₹0Cr | ₹0Cr | 1.4% | 1.50 | 2.37 | 5.1% |
| FY2026 | ₹0Cr | ₹0Cr | 2.3% | 1.11 | 3.26 | 8.3% |
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.