DuPont Decomposition
Why does TNPETRO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.6% = 6.7% × 0.86 × 1.67
Latest: FY2026
Profitability
Net Margin
6.7%
9.7% →6.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.86x
1.84x →0.86x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.67x
1.31x →1.67x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.9 pp over 5 years. Driven by net margin declining (9.7% → 6.7%), asset turnover declining (1.84x → 0.86x), leverage rising (1.31x → 1.67x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.7% | 1.84 | 1.31 | 23.4% |
| FY2023 | ₹0Cr | ₹0Cr | 4.4% | 1.95 | 1.34 | 11.5% |
| FY2024 | ₹0Cr | ₹0Cr | 3.0% | 1.53 | 1.27 | 5.8% |
| FY2025 | ₹0Cr | ₹0Cr | 3.2% | 1.35 | 1.49 | 6.4% |
| FY2026 | ₹0Cr | ₹0Cr | 6.7% | 0.86 | 1.67 | 9.6% |
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.