DuPont Decomposition
Why does TRENT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
24.6% = 8.6% × 1.71 × 1.68
Latest: FY2026
Profitability
Net Margin
8.6%
5.5% →8.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.71x
1.00x →1.71x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.68x
3.11x →1.68x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.5 pp over 4 years. Driven by net margin improving (5.5% → 8.6%), asset turnover improving (1.00x → 1.71x), leverage falling (3.11x → 1.68x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.5% | 1.00 | 3.11 | 17.1% |
| FY2024 | ₹0Cr | ₹0Cr | 12.2% | 1.70 | 1.76 | 36.5% |
| FY2025 | ₹0Cr | ₹0Cr | 9.0% | 1.82 | 1.72 | 28.3% |
| FY2026 | ₹0Cr | ₹0Cr | 8.6% | 1.71 | 1.68 | 24.6% |
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.