DuPont Decomposition
Why does RUSTOMJEE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.2% = 8.9% × 0.29 × 2.39
Latest: FY2025
Profitability
Net Margin
8.9%
11.2% →8.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.29x
0.32x →0.29x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.39x
4.03x →2.39x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.3 pp over 3 years. Driven by net margin declining (11.2% → 8.9%), leverage falling (4.03x → 2.39x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.2% | 0.32 | 4.03 | 14.5% |
| FY2024 | ₹0Cr | ₹0Cr | 5.2% | 0.36 | 3.32 | 6.2% |
| FY2025 | ₹0Cr | ₹0Cr | 8.9% | 0.29 | 2.39 | 6.2% |
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.