DuPont Decomposition
Why does TECHM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.3% = 8.0% × 1.19 × 1.60
Latest: FY2025
Profitability
Net Margin
8.0%
8.2% →8.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.19x
0.30x →1.19x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.60x
1.65x →1.60x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.3 pp over 3 years. Driven by asset turnover improving (0.30x → 1.19x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.2% | 0.30 | 1.65 | 4.0% |
| FY2024 | ₹0Cr | ₹0Cr | 5.2% | 0.30 | 1.63 | 2.5% |
| FY2025 | ₹0Cr | ₹0Cr | 8.0% | 1.19 | 1.60 | 15.3% |
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.