DuPont Decomposition
Why does REDINGTON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.4% = 1.6% × 3.60 × 3.00
Latest: FY2025
Profitability
Net Margin
1.6%
1.5% →1.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
3.60x
0.94x →3.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.00x
3.36x →3.00x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.7 pp over 3 years. Driven by asset turnover improving (0.94x → 3.60x), leverage falling (3.36x → 3.00x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.5% | 0.94 | 3.36 | 4.7% |
| FY2024 | ₹0Cr | ₹0Cr | 1.4% | 0.92 | 3.23 | 4.3% |
| FY2025 | ₹0Cr | ₹0Cr | 1.6% | 3.60 | 3.00 | 17.4% |
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.