DuPont Decomposition
Why does TORNTPHARM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.2% = 16.9% × 0.75 × 1.97
Latest: FY2025
Profitability
Net Margin
16.9%
11.5% →16.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.75x
0.17x →0.75x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.97x
2.42x →1.97x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 20.6 pp over 3 years. Driven by net margin improving (11.5% → 16.9%), asset turnover improving (0.17x → 0.75x), leverage falling (2.42x → 1.97x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.5% | 0.17 | 2.42 | 4.6% |
| FY2024 | ₹0Cr | ₹0Cr | 16.4% | 0.18 | 2.20 | 6.5% |
| FY2025 | ₹0Cr | ₹0Cr | 16.9% | 0.75 | 1.97 | 25.2% |
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.