DuPont Decomposition
Why does TATACOMM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
60.7% = 8.0% × 0.86 × 8.79
Latest: FY2025
Profitability
Net Margin
8.0%
7.2% →8.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.86x
0.22x →0.86x
Revenue per ₹ of assets
Leverage
Equity Multiplier
8.79x
13.54x →8.79x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 39.2 pp over 3 years. Driven by asset turnover improving (0.22x → 0.86x), leverage falling (13.54x → 8.79x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.2% | 0.22 | 13.54 | 21.5% |
| FY2024 | ₹0Cr | ₹0Cr | 5.7% | 0.23 | 13.75 | 18.0% |
| FY2025 | ₹0Cr | ₹0Cr | 8.0% | 0.86 | 8.79 | 60.7% |
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.