DuPont Decomposition
Why does TATACONSUM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.0% = 7.3% × 0.55 × 1.49
Latest: FY2025
Profitability
Net Margin
7.3%
11.5% →7.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.14x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.49x
1.22x →1.49x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.0 pp over 3 years. Driven by net margin declining (11.5% → 7.3%), asset turnover improving (0.14x → 0.55x), leverage rising (1.22x → 1.49x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.5% | 0.14 | 1.22 | 2.0% |
| FY2024 | ₹0Cr | ₹0Cr | 5.4% | 0.14 | 1.75 | 1.3% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 0.55 | 1.49 | 6.0% |
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.