DuPont Decomposition
Why does SANATHAN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.1% = 2.0% × 0.81 × 2.52
Latest: FY2026
Profitability
Net Margin
2.0%
11.4% →2.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
1.74x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.52x
1.82x →2.52x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 31.9 pp over 5 years. Driven by net margin declining (11.4% → 2.0%), asset turnover declining (1.74x → 0.81x), leverage rising (1.82x → 2.52x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.4% | 1.74 | 1.82 | 36.0% |
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 1.71 | 1.67 | 13.4% |
| FY2024 | ₹0Cr | ₹0Cr | 4.6% | 1.31 | 1.73 | 10.5% |
| FY2025 | ₹0Cr | ₹0Cr | 5.3% | 0.85 | 1.95 | 8.9% |
| FY2026 | ₹0Cr | ₹0Cr | 2.0% | 0.81 | 2.52 | 4.1% |
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.