DuPont Decomposition
Why does TATAPOWER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.3% = 6.2% × 0.41 × 3.68
Latest: FY2025
Profitability
Net Margin
6.2%
4.7% →6.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.41x
0.06x →0.41x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.68x
3.52x →3.68x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.3 pp over 3 years. Driven by net margin improving (4.7% → 6.2%), asset turnover improving (0.06x → 0.41x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 0.06 | 3.52 | 1.0% |
| FY2024 | ₹0Cr | ₹0Cr | 17.1% | 0.10 | 3.20 | 5.4% |
| FY2025 | ₹0Cr | ₹0Cr | 6.2% | 0.41 | 3.68 | 9.3% |
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.