DuPont Decomposition
Why does TATVA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.4% = 8.3% × 0.50 × 1.28
Latest: FY2026
Profitability
Net Margin
8.3%
22.2% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.50x
0.66x →0.50x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.28x
1.39x →1.28x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.9 pp over 5 years. Driven by net margin declining (22.2% → 8.3%), asset turnover declining (0.66x → 0.50x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 22.2% | 0.66 | 1.39 | 20.3% |
| FY2023 | ₹0Cr | ₹0Cr | 10.8% | 0.55 | 1.47 | 8.8% |
| FY2024 | ₹0Cr | ₹0Cr | 7.8% | 0.48 | 1.11 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 1.5% | 0.46 | 1.13 | 0.8% |
| FY2026 | ₹0Cr | ₹0Cr | 8.3% | 0.50 | 1.28 | 5.4% |
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.