DuPont Decomposition
Why does TEMBO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
23.5% = 7.3% × 1.22 × 2.65
Latest: FY2025
Profitability
Net Margin
7.3%
2.3% →7.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.22x
2.27x →1.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.65x
2.75x →2.65x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.0 pp over 3 years. Driven by net margin improving (2.3% → 7.3%), asset turnover declining (2.27x → 1.22x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.3% | 2.27 | 2.75 | 14.5% |
| FY2024 | ₹0Cr | ₹0Cr | 3.3% | 2.64 | 2.46 | 21.5% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 1.22 | 2.65 | 23.5% |
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.