DuPont Decomposition
Why does RHIM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.1% = 5.6% × 0.70 × 1.29
Latest: FY2025
Profitability
Net Margin
5.6%
-77.6% →5.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.70x
0.15x →0.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.29x
2.04x →1.29x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 28.5 pp over 3 years. Driven by net margin improving (-77.6% → 5.6%), asset turnover improving (0.15x → 0.70x), leverage falling (2.04x → 1.29x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -77.6% | 0.15 | 2.04 | -23.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -27.3% | 0.18 | 1.33 | -6.7% |
| FY2025 | ₹0Cr | ₹0Cr | 5.6% | 0.70 | 1.29 | 5.1% |
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.