DuPont Decomposition
Why does TARACHAND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.5% = 10.0% × 0.63 × 3.22
Latest: FY2025
Profitability
Net Margin
10.0%
1.9% →10.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.63x
0.63x →0.63x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.22x
3.54x →3.22x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.3 pp over 4 years. Driven by net margin improving (1.9% → 10.0%), leverage falling (3.54x → 3.22x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.9% | 0.63 | 3.54 | 4.1% |
| FY2023 | ₹0Cr | ₹0Cr | 7.5% | 0.33 | 3.24 | 8.1% |
| FY2024 | ₹0Cr | ₹0Cr | 13.6% | 0.18 | 2.71 | 6.6% |
| FY2025 | ₹0Cr | ₹0Cr | 10.0% | 0.63 | 3.22 | 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.