DuPont Decomposition
Why does TAJGVK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.5% = 21.4% × 0.50 × 1.34
Latest: FY2025
Profitability
Net Margin
21.4%
4.5% →21.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.50x
0.31x →0.50x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.91x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.8 pp over 4 years. Driven by net margin improving (4.5% → 21.4%), asset turnover improving (0.31x → 0.50x), leverage falling (1.91x → 1.34x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.5% | 0.31 | 1.91 | 2.7% |
| FY2023 | ₹0Cr | ₹0Cr | 21.1% | 0.50 | 1.64 | 17.3% |
| FY2024 | ₹0Cr | ₹0Cr | 18.5% | 0.49 | 1.49 | 13.6% |
| FY2025 | ₹0Cr | ₹0Cr | 21.4% | 0.50 | 1.34 | 14.5% |
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.