DuPont Decomposition
Why does TIMKEN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 11.9% × 0.94 × 1.27
Latest: FY2026
Profitability
Net Margin
11.9%
15.0% →11.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.94x
0.99x →0.94x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.27x
1.32x →1.27x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.5 pp over 5 years. Driven by net margin declining (15.0% → 11.9%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.0% | 0.99 | 1.32 | 19.7% |
| FY2023 | ₹0Cr | ₹0Cr | 14.0% | 1.09 | 1.25 | 19.2% |
| FY2024 | ₹0Cr | ₹0Cr | 13.5% | 0.97 | 1.24 | 16.2% |
| FY2025 | ₹0Cr | ₹0Cr | 14.5% | 0.93 | 1.20 | 16.3% |
| FY2026 | ₹0Cr | ₹0Cr | 11.9% | 0.94 | 1.27 | 14.2% |
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.