DuPont Decomposition
Why does THANGAMAYL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.8% = 2.4% × 1.92 × 2.32
Latest: FY2025
Profitability
Net Margin
2.4%
2.5% →2.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.92x
2.53x →1.92x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.32x
3.21x →2.32x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.7 pp over 3 years. Driven by asset turnover declining (2.53x → 1.92x), leverage falling (3.21x → 2.32x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.5% | 2.53 | 3.21 | 20.5% |
| FY2024 | ₹0Cr | ₹0Cr | 3.2% | 2.58 | 3.00 | 25.0% |
| FY2025 | ₹0Cr | ₹0Cr | 2.4% | 1.92 | 2.32 | 10.8% |
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.