DuPont Decomposition
Why does RRKABEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.5% = 4.1% × 2.14 × 1.63
Latest: FY2025
Profitability
Net Margin
4.1%
5.0% →4.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.14x
2.11x →2.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.63x
1.64x →1.63x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.6 pp over 4 years.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.0% | 2.11 | 1.64 | 17.1% |
| FY2023 | ₹0Cr | ₹0Cr | 3.4% | 2.10 | 1.86 | 13.4% |
| FY2024 | ₹0Cr | ₹0Cr | 4.5% | 0.61 | 1.57 | 4.3% |
| FY2025 | ₹0Cr | ₹0Cr | 4.1% | 2.14 | 1.63 | 14.5% |
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.