DuPont Decomposition
Why does RITES earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.3% = 17.0% × 0.41 × 2.21
Latest: FY2026
Profitability
Net Margin
17.0%
19.6% →17.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.41x
0.45x →0.41x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.21x
2.34x →2.21x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.4 pp over 5 years. Driven by net margin declining (19.6% → 17.0%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 19.6% | 0.45 | 2.34 | 20.8% |
| FY2023 | ₹0Cr | ₹0Cr | 20.9% | 0.44 | 2.29 | 20.8% |
| FY2024 | ₹0Cr | ₹0Cr | 18.6% | 0.43 | 2.17 | 17.4% |
| FY2025 | ₹0Cr | ₹0Cr | 17.5% | 0.36 | 2.32 | 14.6% |
| FY2026 | ₹0Cr | ₹0Cr | 17.0% | 0.41 | 2.21 | 15.3% |
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.