DuPont Decomposition
Why does SAIPARENT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.9% = 4.0% × 0.68 × 5.85
Latest: FY2025
Profitability
Net Margin
4.0%
4.5% →4.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
0.72x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.85x
4.25x →5.85x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.0 pp over 3 years. Driven by leverage rising (4.25x → 5.85x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.5% | 0.72 | 4.25 | 13.9% |
| FY2024 | ₹0Cr | ₹0Cr | 5.5% | 0.57 | 3.51 | 11.0% |
| FY2025 | ₹0Cr | ₹0Cr | 4.0% | 0.68 | 5.85 | 15.9% |
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.