DuPont Decomposition
Why does RKSWAMY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.4% = 6.5% × 0.80 × 1.62
Latest: FY2026
Profitability
Net Margin
6.5%
8.2% →6.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.80x
0.58x →0.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.62x
24.86x →1.62x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 109.4 pp over 5 years. Driven by net margin declining (8.2% → 6.5%), asset turnover improving (0.58x → 0.80x), leverage falling (24.86x → 1.62x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.2% | 0.58 | 24.86 | 117.8% |
| FY2023 | ₹0Cr | ₹0Cr | 10.7% | 0.93 | 6.93 | 69.1% |
| FY2024 | ₹0Cr | ₹0Cr | 12.0% | 0.84 | 1.64 | 16.5% |
| FY2025 | ₹0Cr | ₹0Cr | 6.3% | 0.73 | 1.62 | 7.5% |
| FY2026 | ₹0Cr | ₹0Cr | 6.5% | 0.80 | 1.62 | 8.4% |
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.