DuPont Decomposition
Why does RSWM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-3.1% = -0.8% × 1.31 × 2.78
Latest: FY2025
Profitability
Net Margin
-0.8%
4.7% →-0.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.31x
0.33x →1.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.78x
2.19x →2.78x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.5 pp over 3 years. Driven by net margin declining (4.7% → -0.8%), asset turnover improving (0.33x → 1.31x), leverage rising (2.19x → 2.78x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 0.33 | 2.19 | 3.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.0% | 0.32 | 2.85 | 2.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -0.8% | 1.31 | 2.78 | -3.1% |
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.