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% = 10.5% × 0.82 × 1.65
Latest: FY2025
Profitability
Net Margin
10.5%
10.4% →10.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.82x
0.20x →0.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
1.67x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.6 pp over 3 years. Driven by asset turnover improving (0.20x → 0.82x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 10.4% | 0.20 | 1.67 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 9.7% | 0.22 | 1.61 | 3.4% |
| FY2025 | ₹0Cr | ₹0Cr | 10.5% | 0.82 | 1.65 | 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.