DuPont Decomposition
Why does TIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.5% = 0.9% × 0.60 × 6.34
Latest: FY2025
Profitability
Net Margin
0.9%
379.5% →0.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.60x
0.16x →0.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
6.34x
13.09x →6.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 800.3 pp over 2 years. Driven by net margin declining (379.5% → 0.9%), asset turnover improving (0.16x → 0.60x), leverage falling (13.09x → 6.34x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 379.5% | 0.16 | 13.09 | 803.7% |
| FY2025 | ₹0Cr | ₹0Cr | 0.9% | 0.60 | 6.34 | 3.5% |
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.