DuPont Decomposition
Why does TATATECH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.9% = 9.9% × 0.61 × 2.28
Latest: FY2026
Profitability
Net Margin
9.9%
12.4% →9.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.61x
0.84x →0.61x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.28x
1.85x →2.28x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.2 pp over 5 years. Driven by net margin declining (12.4% → 9.9%), asset turnover declining (0.84x → 0.61x), leverage rising (1.85x → 2.28x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.4% | 0.84 | 1.85 | 19.2% |
| FY2023 | ₹0Cr | ₹0Cr | 14.1% | 0.85 | 1.74 | 20.9% |
| FY2024 | ₹0Cr | ₹0Cr | 13.3% | 0.92 | 1.73 | 21.1% |
| FY2025 | ₹0Cr | ₹0Cr | 13.1% | 0.78 | 1.86 | 18.9% |
| FY2026 | ₹0Cr | ₹0Cr | 9.9% | 0.61 | 2.28 | 13.9% |
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.