DuPont Decomposition
Why does RGL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.3% = 3.7% × 0.89 × 1.64
Latest: FY2025
Profitability
Net Margin
3.7%
3.9% →3.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.89x
1.16x →0.89x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.64x
1.87x →1.64x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.1 pp over 3 years. Driven by asset turnover declining (1.16x → 0.89x), leverage falling (1.87x → 1.64x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.9% | 1.16 | 1.87 | 8.5% |
| FY2024 | ₹0Cr | ₹0Cr | 3.4% | 1.04 | 1.76 | 6.3% |
| FY2025 | ₹0Cr | ₹0Cr | 3.7% | 0.89 | 1.64 | 5.3% |
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.