DuPont Decomposition
Why does REDTAPE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
23.6% = 9.9% × 1.05 × 2.26
Latest: FY2026
Profitability
Net Margin
9.9%
9.6% →9.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
0.37x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.26x
2.46x →2.26x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.9 pp over 5 years. Driven by asset turnover improving (0.37x → 1.05x), leverage falling (2.46x → 2.26x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.6% | 0.37 | 2.46 | 8.7% |
| FY2023 | ₹0Cr | ₹0Cr | 9.7% | 1.18 | 2.60 | 29.8% |
| FY2024 | ₹0Cr | ₹0Cr | 9.6% | 1.15 | 2.45 | 27.2% |
| FY2025 | ₹0Cr | ₹0Cr | 8.4% | 0.91 | 2.82 | 21.6% |
| FY2026 | ₹0Cr | ₹0Cr | 9.9% | 1.05 | 2.26 | 23.6% |
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.