DuPont Decomposition
Why does RTNINDIA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.1% = 1.3% × 2.50 × 2.85
Latest: FY2025
Profitability
Net Margin
1.3%
-3.4% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.50x
1.86x →2.50x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.85x
5.34x →2.85x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 42.8 pp over 3 years. Driven by net margin improving (-3.4% → 1.3%), asset turnover improving (1.86x → 2.50x), leverage falling (5.34x → 2.85x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -3.4% | 1.86 | 5.34 | -33.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.7% | 2.05 | 3.21 | 50.8% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 2.50 | 2.85 | 9.1% |
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.