RoE: what it means and how to read it
What is RoE?
Return on equity: yearly profit ÷ the shareholders' money in the business. 20% means ₹20 of profit a year for every ₹100 of shareholders' funds.
Return on equity measures how much profit a company earns on each rupee its shareholders have in the business. An ROE of 20% means ₹20 of profit for every ₹100 of shareholders' money. Sustained over years it is the rate at which the owners' capital compounds inside the company, which is why it is among the first figures long-term investors look at.
ROE can be split into three parts, the DuPont breakdown: profit margin, how hard the assets are worked (asset turnover) and how much debt sits on top of the equity (leverage). Two companies with the same ROE can be very different businesses: one earns it from fat margins, another from borrowing heavily. The second is far riskier.
How it is calculated
A worked example
Why does RoE matter?
Shows how well management uses your money.
What is a good RoE?
15% or more is commonly seen as good. Debt can push RoE up, so check RoCE and debt too.
Around 15% or more, held for many years, is generally seen as good in India, and it should clearly exceed the cost of equity (roughly 12% to 14%). Always read it beside debt: a high ROE with low debt is the mark of a strong business; a high ROE with high debt is borrowed performance.
Reading scale
What are the common mistakes with RoE?
What is a typical RoE in India today?
The median across the 4905 listed companies that report it, as of 12 Oct 2026. Half sit above each figure and half below.
By company size
By industry
What is RoE for India's largest companies today?
The latest figure for the largest companies with a page here. Each links to what the rest of that company's numbers mean.