DuPont Decomposition
Why does TARSONS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.3% = 3.4% × 0.36 × 1.87
Latest: FY2026
Profitability
Net Margin
3.4%
33.6% →3.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.36x
0.55x →0.36x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.87x
1.11x →1.87x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 18.3 pp over 5 years. Driven by net margin declining (33.6% → 3.4%), asset turnover declining (0.55x → 0.36x), leverage rising (1.11x → 1.87x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 33.6% | 0.55 | 1.11 | 20.6% |
| FY2023 | ₹0Cr | ₹0Cr | 28.7% | 0.39 | 1.27 | 14.2% |
| FY2024 | ₹0Cr | ₹0Cr | 14.5% | 0.30 | 1.59 | 7.0% |
| FY2025 | ₹0Cr | ₹0Cr | 7.6% | 0.36 | 1.71 | 4.7% |
| FY2026 | ₹0Cr | ₹0Cr | 3.4% | 0.36 | 1.87 | 2.3% |
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.