DuPont Decomposition
Why does TARMAT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.1% = 1.9% × 0.43 × 1.36
Latest: FY2025
Profitability
Net Margin
1.9%
2.5% →1.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.43x
0.82x →0.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.36x
2.35x →1.36x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.8 pp over 4 years. Driven by asset turnover declining (0.82x → 0.43x), leverage falling (2.35x → 1.36x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.5% | 0.82 | 2.35 | 4.9% |
| FY2023 | ₹0Cr | ₹0Cr | 5.2% | 0.67 | 1.63 | 5.7% |
| FY2024 | ₹0Cr | ₹-0Cr | -1.3% | 0.45 | 1.53 | -0.9% |
| FY2025 | ₹0Cr | ₹0Cr | 1.9% | 0.43 | 1.36 | 1.1% |
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.