DuPont Decomposition
Why does RNBDENIMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.1% = 6.1% × 1.14 × 1.59
Latest: FY2025
Profitability
Net Margin
6.1%
7.4% →6.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.14x
1.55x →1.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.59x
2.85x →1.59x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 21.6 pp over 4 years. Driven by net margin declining (7.4% → 6.1%), asset turnover declining (1.55x → 1.14x), leverage falling (2.85x → 1.59x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.4% | 1.55 | 2.85 | 32.7% |
| FY2023 | ₹0Cr | ₹0Cr | 5.9% | 1.65 | 1.94 | 18.8% |
| FY2024 | ₹0Cr | ₹0Cr | 5.4% | 1.22 | 1.57 | 10.4% |
| FY2025 | ₹0Cr | ₹0Cr | 6.1% | 1.14 | 1.59 | 11.1% |
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.