DuPont Decomposition
Why does RELINFRA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
34.2% = 21.2% × 0.35 × 4.56
Latest: FY2025
Profitability
Net Margin
21.2%
-5.4% →21.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.35x
0.30x →0.35x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.56x
5.04x →4.56x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 42.3 pp over 4 years. Driven by net margin improving (-5.4% → 21.2%), leverage falling (5.04x → 4.56x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -5.4% | 0.30 | 5.04 | -8.1% |
| FY2023 | ₹0Cr | ₹-0Cr | -15.7% | 0.34 | 6.56 | -34.7% |
| FY2024 | ₹0Cr | ₹-0Cr | -7.4% | 0.37 | 6.77 | -18.4% |
| FY2025 | ₹0Cr | ₹0Cr | 21.2% | 0.35 | 4.56 | 34.2% |
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.