DuPont Decomposition
Why does RMDRIP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
29.2% = 18.3% × 0.84 × 1.90
Latest: FY2025
Profitability
Net Margin
18.3%
-5.3% →18.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.84x
0.58x →0.84x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.90x
2.41x →1.90x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 36.6 pp over 4 years. Driven by net margin improving (-5.3% → 18.3%), asset turnover improving (0.58x → 0.84x), leverage falling (2.41x → 1.90x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -5.3% | 0.58 | 2.41 | -7.4% |
| FY2023 | ₹0Cr | ₹0Cr | 0.3% | 0.38 | 2.26 | 0.2% |
| FY2024 | ₹0Cr | ₹0Cr | 10.8% | 0.75 | 1.64 | 13.3% |
| FY2025 | ₹0Cr | ₹0Cr | 18.3% | 0.84 | 1.90 | 29.2% |
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.