DuPont Decomposition
Why does TANLA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.5% = 11.5% × 1.18 × 1.50
Latest: FY2026
Profitability
Net Margin
11.5%
16.8% →11.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.18x
1.35x →1.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.76x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 19.4 pp over 5 years. Driven by net margin declining (16.8% → 11.5%), asset turnover declining (1.35x → 1.18x), leverage falling (1.76x → 1.50x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.8% | 1.35 | 1.76 | 39.8% |
| FY2023 | ₹0Cr | ₹0Cr | 13.3% | 1.39 | 1.59 | 29.5% |
| FY2024 | ₹0Cr | ₹0Cr | 14.0% | 1.31 | 1.55 | 28.2% |
| FY2025 | ₹0Cr | ₹0Cr | 12.6% | 1.21 | 1.47 | 22.4% |
| FY2026 | ₹0Cr | ₹0Cr | 11.5% | 1.18 | 1.50 | 20.5% |
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.