DuPont Decomposition
Why does THEJO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.8% = 9.1% × 1.23 × 1.50
Latest: FY2025
Profitability
Net Margin
9.1%
8.9% →9.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.23x
1.40x →1.23x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.84x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.0 pp over 4 years. Driven by asset turnover declining (1.40x → 1.23x), leverage falling (1.84x → 1.50x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.9% | 1.40 | 1.84 | 22.8% |
| FY2023 | ₹0Cr | ₹0Cr | 6.8% | 1.30 | 1.86 | 16.5% |
| FY2024 | ₹0Cr | ₹0Cr | 10.0% | 1.35 | 1.65 | 22.2% |
| FY2025 | ₹0Cr | ₹0Cr | 9.1% | 1.23 | 1.50 | 16.8% |
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.