DuPont Decomposition
Why does TRU earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-36.5% = -30.8% × 0.27 × 4.31
Latest: FY2025
Profitability
Net Margin
-30.8%
5.5% →-30.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.27x
0.15x →0.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.31x
2.74x →4.31x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 38.9 pp over 4 years. Driven by net margin declining (5.5% → -30.8%), asset turnover improving (0.15x → 0.27x), leverage rising (2.74x → 4.31x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.5% | 0.15 | 2.74 | 2.3% |
| FY2023 | ₹0Cr | ₹0Cr | 0.5% | 0.18 | 3.11 | 0.3% |
| FY2024 | ₹0Cr | ₹0Cr | 6.9% | 0.17 | 4.35 | 5.2% |
| FY2025 | ₹0Cr | ₹-0Cr | -30.8% | 0.27 | 4.31 | -36.5% |
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.