DuPont Decomposition
Why does TERASOFT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.0% = 10.4% × 0.73 × 2.23
Latest: FY2026
Profitability
Net Margin
10.4%
-1.0% →10.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
0.46x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.23x
2.55x →2.23x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 18.2 pp over 5 years. Driven by net margin improving (-1.0% → 10.4%), asset turnover improving (0.46x → 0.73x), leverage falling (2.55x → 2.23x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -1.0% | 0.46 | 2.55 | -1.2% |
| FY2023 | ₹0Cr | ₹0Cr | 3.0% | 0.59 | 1.83 | 3.2% |
| FY2024 | ₹0Cr | ₹0Cr | 4.6% | 0.41 | 1.84 | 3.5% |
| FY2025 | ₹0Cr | ₹0Cr | 8.8% | 0.50 | 1.74 | 7.7% |
| FY2026 | ₹0Cr | ₹0Cr | 10.4% | 0.73 | 2.23 | 17.0% |
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.