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%
8.2% →16.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.18x
0.71x →1.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.37x
2.09x →1.37x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.8 pp over 3 years. Driven by net margin improving (8.2% → 16.0%), asset turnover improving (0.71x → 1.18x), leverage falling (2.09x → 1.37x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.2% | 0.71 | 2.09 | 12.2% |
| FY2024 | ₹0Cr | ₹0Cr | 5.0% | 0.74 | 1.57 | 5.8% |
| 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.