DuPont Decomposition
Why does RELIANCE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.9% = 7.6% × 0.49 × 2.41
Latest: FY2026
Profitability
Net Margin
7.6%
8.8% →7.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.49x
0.30x →0.49x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.41x
1.92x →2.41x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.9 pp over 5 years. Driven by net margin declining (8.8% → 7.6%), asset turnover improving (0.30x → 0.49x), leverage rising (1.92x → 2.41x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.8% | 0.30 | 1.92 | 5.0% |
| FY2023 | ₹0.1Cr | ₹0Cr | 7.6% | 0.55 | 2.25 | 9.3% |
| FY2024 | ₹0.1Cr | ₹0Cr | 7.7% | 0.51 | 2.21 | 8.8% |
| FY2025 | ₹0.1Cr | ₹0Cr | 7.2% | 0.49 | 2.31 | 8.3% |
| FY2026 | ₹0.1Cr | ₹0Cr | 7.6% | 0.49 | 2.41 | 8.9% |
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.