DuPont Decomposition
Why does RPOWER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.0% = 41.2% × 0.17 × 2.53
Latest: FY2025
Profitability
Net Margin
41.2%
3.6% →41.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.17x
0.14x →0.17x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.53x
4.19x →2.53x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 15.8 pp over 3 years. Driven by net margin improving (3.6% → 41.2%), leverage falling (4.19x → 2.53x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 0.14 | 4.19 | 2.2% |
| FY2024 | ₹0Cr | ₹-0Cr | -5.3% | 0.17 | 3.77 | -3.4% |
| FY2025 | ₹0Cr | ₹0Cr | 41.2% | 0.17 | 2.53 | 18.0% |
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.