DuPont Decomposition
Why does TVSSCS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-0.7% = -0.1% × 1.74 × 3.14
Latest: FY2025
Profitability
Net Margin
-0.1%
-0.5% →-0.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.74x
1.60x →1.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.14x
7.68x →3.14x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.8 pp over 4 years. Driven by asset turnover improving (1.60x → 1.74x), leverage falling (7.68x → 3.14x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -0.5% | 1.60 | 7.68 | -6.5% |
| FY2023 | ₹0Cr | ₹0Cr | 0.4% | 1.61 | 8.17 | 5.2% |
| FY2024 | ₹0Cr | ₹0Cr | 0.1% | 1.58 | 3.21 | 0.3% |
| FY2025 | ₹0Cr | ₹-0Cr | -0.1% | 1.74 | 3.14 | -0.7% |
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.