DuPont Decomposition
Why does TI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
26.0% = 16.0% × 1.18 × 1.37
Latest: FY2025
Profitability
Net Margin
16.0%
5.8% →16.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.18x
0.77x →1.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.37x
7.59x →1.37x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.8 pp over 4 years. Driven by net margin improving (5.8% → 16.0%), asset turnover improving (0.77x → 1.18x), leverage falling (7.59x → 1.37x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.8% | 0.77 | 7.59 | 33.8% |
| FY2023 | ₹0Cr | ₹0Cr | 13.0% | 1.14 | 2.09 | 31.0% |
| FY2024 | ₹0Cr | ₹0Cr | 9.9% | 1.35 | 1.58 | 21.1% |
| FY2025 | ₹0Cr | ₹0Cr | 16.0% | 1.18 | 1.37 | 26.0% |
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.