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
13.2% = 3.5% × 1.82 × 2.03
Latest: FY2025
Profitability
Net Margin
3.5%
2.7% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.82x
1.96x →1.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.03x
2.44x →2.03x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~13%. Driven by asset turnover declining (1.96x → 1.82x), leverage falling (2.44x → 2.03x).
Historical Decomposition
Last 4 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 | 2.46 | 16.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.5% | 2.06 | 2.48 | 18.0% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 1.82 | 2.03 | 13.2% |
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.