DuPont Decomposition
Why does RHL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.3% = 12.2% × 0.15 × 1.26
Latest: FY2025
Profitability
Net Margin
12.2%
-86.4% →12.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.15x
0.08x →0.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.26x
1.73x →1.26x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.8 pp over 4 years. Driven by net margin improving (-86.4% → 12.2%), leverage falling (1.73x → 1.26x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -86.4% | 0.08 | 1.73 | -11.5% |
| FY2023 | ₹0Cr | ₹0Cr | 52.0% | 0.13 | 1.21 | 8.0% |
| FY2024 | ₹0Cr | ₹0Cr | 3.9% | 0.14 | 1.27 | 0.7% |
| FY2025 | ₹0Cr | ₹0Cr | 12.2% | 0.15 | 1.26 | 2.3% |
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.