DuPont Decomposition
Why does TEXRAIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.8% = 4.9% × 1.05 × 1.71
Latest: FY2025
Profitability
Net Margin
4.9%
2.2% →4.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
0.25x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.71x
2.43x →1.71x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.5 pp over 3 years. Driven by net margin improving (2.2% → 4.9%), asset turnover improving (0.25x → 1.05x), leverage falling (2.43x → 1.71x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.2% | 0.25 | 2.43 | 1.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.0% | 0.27 | 1.65 | 1.8% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 1.05 | 1.71 | 8.8% |
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.