DuPont Decomposition
Why does SALASAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.4% = 1.4% × 0.82 × 2.20
Latest: FY2025
Profitability
Net Margin
1.4%
4.5% →1.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.82x
1.02x →0.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.20x
2.42x →2.20x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.7 pp over 4 years. Driven by net margin declining (4.5% → 1.4%), asset turnover declining (1.02x → 0.82x), leverage falling (2.42x → 2.20x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.5% | 1.02 | 2.42 | 11.2% |
| FY2023 | ₹0Cr | ₹0Cr | 4.1% | 1.07 | 2.28 | 10.0% |
| FY2024 | ₹0Cr | ₹0Cr | 4.5% | 1.02 | 2.56 | 11.8% |
| FY2025 | ₹0Cr | ₹0Cr | 1.4% | 0.82 | 2.20 | 2.4% |
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.