DuPont Decomposition
Why does SAKSOFT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.6% = 12.3% × 0.89 × 1.60
Latest: FY2025
Profitability
Net Margin
12.3%
13.7% →12.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.89x
0.32x →0.89x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.60x
1.40x →1.60x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.4 pp over 3 years. Driven by net margin declining (13.7% → 12.3%), asset turnover improving (0.32x → 0.89x), leverage rising (1.40x → 1.60x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.7% | 0.32 | 1.40 | 6.2% |
| FY2024 | ₹0Cr | ₹0Cr | 11.9% | 0.25 | 1.56 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 12.3% | 0.89 | 1.60 | 17.6% |
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.