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
16.2% = 8.5% × 1.15 × 1.67
Latest: FY2026
Profitability
Net Margin
8.5%
9.1% →8.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.15x
1.15x →1.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.67x
1.65x →1.67x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.1 pp over 4 years.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.1% | 1.15 | 1.65 | 17.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.5% | 1.20 | 1.63 | 8.8% |
| FY2025 | ₹0Cr | ₹0Cr | 8.0% | 1.19 | 1.63 | 15.5% |
| FY2026 | ₹0Cr | ₹0Cr | 8.5% | 1.15 | 1.67 | 16.2% |
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.