DuPont Decomposition
Why does THOMASCOTT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.1% = 8.0% × 1.14 × 1.33
Latest: FY2025
Profitability
Net Margin
8.0%
11.2% →8.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.14x
0.35x →1.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
4.75x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.6 pp over 3 years. Driven by net margin declining (11.2% → 8.0%), asset turnover improving (0.35x → 1.14x), leverage falling (4.75x → 1.33x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.2% | 0.35 | 4.75 | 18.7% |
| FY2024 | ₹0Cr | ₹0Cr | 15.6% | 0.37 | 1.36 | 7.9% |
| FY2025 | ₹0Cr | ₹0Cr | 8.0% | 1.14 | 1.33 | 12.1% |
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.