DuPont Decomposition
Why does TIIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.1% = 10.3% × 0.85 × 1.61
Latest: FY2026
Profitability
Net Margin
10.3%
14.9% →10.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.85x
0.85x →0.85x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.61x
1.58x →1.61x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.9 pp over 5 years. Driven by net margin declining (14.9% → 10.3%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.9% | 0.85 | 1.58 | 20.0% |
| FY2023 | ₹0Cr | ₹0Cr | 14.4% | 0.79 | 1.67 | 18.9% |
| FY2024 | ₹0Cr | ₹0Cr | 12.8% | 0.77 | 1.61 | 15.8% |
| FY2025 | ₹0Cr | ₹0Cr | 9.9% | 0.87 | 1.69 | 14.5% |
| FY2026 | ₹0Cr | ₹0Cr | 10.3% | 0.85 | 1.61 | 14.1% |
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.