DuPont Decomposition
Why does TFCILTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.5% = 42.5% × 0.12 × 1.73
Latest: FY2025
Profitability
Net Margin
42.5%
41.5% →42.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.12x
0.03x →0.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.73x
2.01x →1.73x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.1 pp over 3 years. Driven by leverage falling (2.01x → 1.73x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 41.5% | 0.03 | 2.01 | 2.5% |
| FY2024 | ₹0Cr | ₹0Cr | 35.4% | 0.03 | 1.93 | 1.9% |
| FY2025 | ₹0Cr | ₹0Cr | 42.5% | 0.12 | 1.73 | 8.5% |
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.