DuPont Decomposition
Why does RSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.7% = 5.0% × 1.68 × 1.65
Latest: FY2026
Profitability
Net Margin
5.0%
2.5% →5.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.68x
3.18x →1.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
3.66x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.9 pp over 4 years. Driven by net margin improving (2.5% → 5.0%), asset turnover declining (3.18x → 1.68x), leverage falling (3.66x → 1.65x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.5% | 3.18 | 3.66 | 29.6% |
| FY2024 | ₹0Cr | ₹0Cr | 3.5% | 2.80 | 2.89 | 28.2% |
| FY2025 | ₹0Cr | ₹0Cr | 4.3% | 2.22 | 2.77 | 26.2% |
| FY2026 | ₹0Cr | ₹0Cr | 5.0% | 1.68 | 1.65 | 13.7% |
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.