DuPont Decomposition
Why does TMCV earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.7% = 5.3% × 1.15 × 3.08
Latest: FY2025
Profitability
Net Margin
5.3%
7.4% →5.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.15x
1.16x →1.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.08x
3.98x →3.08x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.7 pp over 2 years. Driven by net margin declining (7.4% → 5.3%), leverage falling (3.98x → 3.08x).
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 7.4% | 1.16 | 3.98 | 34.4% |
| FY2025 | ₹0Cr | ₹0Cr | 5.3% | 1.15 | 3.08 | 18.7% |
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.