DuPont Decomposition
Why does RELCHEMQ earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.0% = 1.1% × 0.74 × 3.46
Latest: FY2025
Profitability
Net Margin
1.1%
5.2% →1.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.74x
1.04x →0.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.46x
2.74x →3.46x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.0 pp over 4 years. Driven by net margin declining (5.2% → 1.1%), asset turnover declining (1.04x → 0.74x), leverage rising (2.74x → 3.46x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.2% | 1.04 | 2.74 | 14.9% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 0.90 | 3.01 | 9.4% |
| FY2024 | ₹0Cr | ₹0Cr | 0.9% | 0.74 | 3.60 | 2.4% |
| FY2025 | ₹0Cr | ₹0Cr | 1.1% | 0.74 | 3.46 | 3.0% |
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.