DuPont Decomposition
Why does RUCHIRA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.4% = 10.2% × 1.07 × 1.32
Latest: FY2025
Profitability
Net Margin
10.2%
5.4% →10.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.07x
1.33x →1.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.32x
1.49x →1.32x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.8 pp over 4 years. Driven by net margin improving (5.4% → 10.2%), asset turnover declining (1.33x → 1.07x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.4% | 1.33 | 1.49 | 10.7% |
| FY2023 | ₹0Cr | ₹0Cr | 8.4% | 1.58 | 1.34 | 17.8% |
| FY2024 | ₹0Cr | ₹0Cr | 7.5% | 1.25 | 1.26 | 11.9% |
| FY2025 | ₹0Cr | ₹0Cr | 10.2% | 1.07 | 1.32 | 14.4% |
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.