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% = 6.6% × 0.92 × 1.34
Latest: FY2026
Profitability
Net Margin
6.6%
8.8% →6.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.92x
1.11x →0.92x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.35x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.1 pp over 5 years. Driven by net margin declining (8.8% → 6.6%), asset turnover declining (1.11x → 0.92x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.8% | 1.11 | 1.35 | 13.2% |
| 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% |
| FY2026 | ₹0Cr | ₹0Cr | 6.6% | 0.92 | 1.34 | 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.