DuPont Decomposition
Why does RML earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.3% = 2.8% × 1.53 × 3.36
Latest: FY2026
Profitability
Net Margin
2.8%
0.6% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.53x
1.39x →1.53x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.36x
5.39x →3.36x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.7 pp over 5 years. Driven by net margin improving (0.6% → 2.8%), asset turnover improving (1.39x → 1.53x), leverage falling (5.39x → 3.36x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 0.6% | 1.39 | 5.39 | 4.7% |
| FY2023 | ₹0Cr | ₹0Cr | 1.3% | 1.72 | 5.58 | 12.4% |
| FY2024 | ₹0Cr | ₹0Cr | 1.6% | 1.61 | 3.23 | 8.3% |
| FY2025 | ₹0Cr | ₹0Cr | 1.1% | 1.50 | 3.38 | 5.6% |
| FY2026 | ₹0Cr | ₹0Cr | 2.8% | 1.53 | 3.36 | 14.3% |
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.