DuPont Decomposition
Why does THERMAX earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.0% = 6.7% × 0.81 × 2.39
Latest: FY2026
Profitability
Net Margin
6.7%
5.2% →6.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
0.81x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.39x
2.14x →2.39x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.0 pp over 5 years. Driven by net margin improving (5.2% → 6.7%), leverage rising (2.14x → 2.39x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.2% | 0.81 | 2.14 | 8.9% |
| FY2023 | ₹0Cr | ₹0Cr | 5.6% | 0.91 | 2.29 | 11.6% |
| FY2024 | ₹0Cr | ₹0Cr | 7.0% | 0.91 | 2.29 | 14.5% |
| FY2025 | ₹0Cr | ₹0Cr | 6.1% | 0.86 | 2.44 | 12.8% |
| FY2026 | ₹0Cr | ₹0Cr | 6.7% | 0.81 | 2.39 | 13.0% |
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.