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
23.8% = 3.6% × 1.59 × 4.11
Latest: FY2026
Profitability
Net Margin
3.6%
7.4% →3.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.59x
1.16x →1.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.11x
4.36x →4.11x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.0 pp over 3 years. Driven by net margin declining (7.4% → 3.6%), asset turnover improving (1.16x → 1.59x), leverage falling (4.36x → 4.11x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 7.4% | 1.16 | 4.36 | 37.7% |
| FY2025 | ₹0Cr | ₹0Cr | 5.3% | 1.15 | 3.26 | 19.8% |
| FY2026 | ₹0Cr | ₹0Cr | 3.6% | 1.59 | 4.11 | 23.8% |
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.