DuPont Decomposition
Why does TVSHLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
26.2% = 3.0% × 0.87 × 9.90
Latest: FY2026
Profitability
Net Margin
3.0%
1.7% →3.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
0.84x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.90x
6.02x →9.90x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 17.6 pp over 5 years. Driven by net margin improving (1.7% → 3.0%), leverage rising (6.02x → 9.90x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.7% | 0.84 | 6.02 | 8.7% |
| FY2023 | ₹0Cr | ₹0Cr | 2.0% | 0.83 | 12.14 | 20.0% |
| FY2024 | ₹0Cr | ₹0Cr | 2.1% | 0.87 | 15.75 | 28.2% |
| FY2025 | ₹0Cr | ₹0Cr | 2.7% | 0.80 | 11.56 | 24.8% |
| FY2026 | ₹0Cr | ₹0Cr | 3.0% | 0.87 | 9.90 | 26.2% |
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.