DuPont Decomposition
Why does TEGA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.3% = 12.4% × 0.77 × 1.50
Latest: FY2025
Profitability
Net Margin
12.4%
19.5% →12.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.77x
0.24x →0.77x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.56x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.0 pp over 3 years. Driven by net margin declining (19.5% → 12.4%), asset turnover improving (0.24x → 0.77x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 19.5% | 0.24 | 1.56 | 7.4% |
| FY2024 | ₹0Cr | ₹0Cr | 17.6% | 0.27 | 1.59 | 7.5% |
| FY2025 | ₹0Cr | ₹0Cr | 12.4% | 0.77 | 1.50 | 14.3% |
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.