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
9.5% = 6.0% × 0.36 × 4.44
Latest: FY2026
Profitability
Net Margin
6.0%
4.2% →6.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.36x
0.37x →0.36x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.44x
5.03x →4.44x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.7 pp over 5 years. Driven by net margin improving (4.2% → 6.0%), leverage falling (5.03x → 4.44x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.2% | 0.37 | 5.03 | 7.8% |
| FY2023 | ₹0Cr | ₹0Cr | 6.2% | 0.42 | 4.46 | 11.6% |
| FY2024 | ₹0Cr | ₹0Cr | 6.1% | 0.43 | 4.31 | 11.4% |
| FY2025 | ₹0Cr | ₹0Cr | 6.1% | 0.42 | 4.37 | 11.1% |
| FY2026 | ₹0Cr | ₹0Cr | 6.0% | 0.36 | 4.44 | 9.5% |
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.