DuPont Decomposition
Why does RELAXO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.1% = 6.1% × 1.01 × 1.32
Latest: FY2025
Profitability
Net Margin
6.1%
5.6% →6.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
1.11x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.32x
1.34x →1.32x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~8%. Driven by asset turnover declining (1.11x → 1.01x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.6% | 1.11 | 1.34 | 8.3% |
| FY2024 | ₹0Cr | ₹0Cr | 6.9% | 1.07 | 1.36 | 10.0% |
| FY2025 | ₹0Cr | ₹0Cr | 6.1% | 1.01 | 1.32 | 8.1% |
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.