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
6.4% = 3.2% × 1.35 × 1.49
Latest: FY2025
Profitability
Net Margin
3.2%
4.4% →3.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.35x
1.94x →1.35x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.49x
1.34x →1.49x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.0 pp over 3 years. Driven by net margin declining (4.4% → 3.2%), asset turnover declining (1.94x → 1.35x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.4% | 1.94 | 1.34 | 11.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.0% | 1.53 | 1.27 | 5.8% |
| FY2025 | ₹0Cr | ₹0Cr | 3.2% | 1.35 | 1.49 | 6.4% |
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.