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
22.4% = 12.6% × 1.21 × 1.47
Latest: FY2025
Profitability
Net Margin
12.6%
6.4% →12.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.21x
0.29x →1.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.47x
1.57x →1.47x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 19.5 pp over 3 years. Driven by net margin improving (6.4% → 12.6%), asset turnover improving (0.29x → 1.21x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.4% | 0.29 | 1.57 | 2.9% |
| FY2024 | ₹0Cr | ₹0Cr | 12.9% | 0.33 | 1.55 | 6.7% |
| FY2025 | ₹0Cr | ₹0Cr | 12.6% | 1.21 | 1.47 | 22.4% |
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.