DuPont Decomposition
Why does TTL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.5% = 1.9% × 1.03 × 2.27
Latest: FY2025
Profitability
Net Margin
1.9%
3.8% →1.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.03x
1.42x →1.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.27x
3.41x →2.27x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.7 pp over 4 years. Driven by net margin declining (3.8% → 1.9%), asset turnover declining (1.42x → 1.03x), leverage falling (3.41x → 2.27x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.8% | 1.42 | 3.41 | 18.2% |
| FY2023 | ₹0Cr | ₹-0Cr | -6.3% | 0.85 | 3.51 | -18.9% |
| FY2024 | ₹0Cr | ₹0Cr | 2.2% | 0.88 | 3.27 | 6.5% |
| FY2025 | ₹0Cr | ₹0Cr | 1.9% | 1.03 | 2.27 | 4.5% |
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.