DuPont Decomposition
Why does SAKHTISUG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
40.3% = 8.8% × 0.60 × 7.71
Latest: FY2025
Profitability
Net Margin
8.8%
12.3% →8.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.60x
0.68x →0.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
7.71x
13.12x →7.71x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 69.5 pp over 2 years. Driven by net margin declining (12.3% → 8.8%), leverage falling (13.12x → 7.71x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 12.3% | 0.68 | 13.12 | 109.8% |
| FY2025 | ₹0Cr | ₹0Cr | 8.8% | 0.60 | 7.71 | 40.3% |
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.