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
29.1% = 4.0% × 0.87 × 8.24
Latest: FY2026
Profitability
Net Margin
4.0%
10.1% →4.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
0.87x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
8.24x
13.54x →8.24x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 89.2 pp over 4 years. Driven by net margin declining (10.1% → 4.0%), leverage falling (13.54x → 8.24x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 10.1% | 0.87 | 13.54 | 118.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.7% | 0.85 | 13.75 | 54.2% |
| FY2025 | ₹0Cr | ₹0Cr | 8.0% | 0.87 | 8.80 | 60.8% |
| FY2026 | ₹0Cr | ₹0Cr | 4.0% | 0.87 | 8.24 | 29.1% |
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.