DuPont Decomposition
Why does TORNTPOWER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.7% = 8.3% × 0.64 × 2.37
Latest: FY2026
Profitability
Net Margin
8.3%
3.2% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.56x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.37x
2.52x →2.37x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.1 pp over 5 years. Driven by net margin improving (3.2% → 8.3%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.2% | 0.56 | 2.52 | 4.6% |
| FY2023 | ₹0Cr | ₹0Cr | 8.3% | 0.85 | 2.72 | 19.2% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 0.81 | 2.77 | 15.2% |
| FY2025 | ₹0Cr | ₹0Cr | 10.3% | 0.80 | 2.08 | 17.0% |
| FY2026 | ₹0Cr | ₹0Cr | 8.3% | 0.64 | 2.37 | 12.7% |
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.