DuPont Decomposition
Why does TRF earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
30.9% = 21.5% × 0.35 × 4.07
Latest: FY2025
Profitability
Net Margin
21.5%
50.0% →21.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.35x
0.54x →0.35x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.07x
14.86x →4.07x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 372.0 pp over 3 years. Driven by net margin declining (50.0% → 21.5%), asset turnover declining (0.54x → 0.35x), leverage falling (14.86x → 4.07x). 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 |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 50.0% | 0.54 | 14.86 | 402.9% |
| FY2024 | ₹0Cr | ₹0Cr | 24.7% | 0.45 | 7.92 | 88.6% |
| FY2025 | ₹0Cr | ₹0Cr | 21.5% | 0.35 | 4.07 | 30.9% |
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.