DuPont Decomposition
Why does TALBROAUTO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.9% = 11.4% × 0.87 × 1.50
Latest: FY2025
Profitability
Net Margin
11.4%
9.2% →11.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
0.99x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.89x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.3 pp over 3 years. Driven by net margin improving (9.2% → 11.4%), asset turnover declining (0.99x → 0.87x), leverage falling (1.89x → 1.50x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.2% | 0.99 | 1.89 | 17.3% |
| FY2024 | ₹0Cr | ₹0Cr | 15.1% | 0.85 | 1.59 | 20.5% |
| FY2025 | ₹0Cr | ₹0Cr | 11.4% | 0.87 | 1.50 | 14.9% |
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.