DuPont Decomposition
Why does RITCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.9% = 2.4% × 1.74 × 2.37
Latest: FY2026
Profitability
Net Margin
2.4%
2.7% →2.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.74x
1.96x →1.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.37x
2.44x →2.37x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.3 pp over 5 years. Driven by asset turnover declining (1.96x → 1.74x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.7% | 1.96 | 2.44 | 13.1% |
| FY2023 | ₹0Cr | ₹0Cr | 3.3% | 2.06 | 2.45 | 16.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.5% | 2.06 | 2.47 | 18.0% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 1.82 | 2.02 | 13.1% |
| FY2026 | ₹0Cr | ₹0Cr | 2.4% | 1.74 | 2.37 | 9.9% |
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.