DuPont Decomposition
Why does SAPPHIRE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.4% = 0.7% × 0.95 × 2.18
Latest: FY2025
Profitability
Net Margin
0.7%
27.9% →0.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
0.19x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.18x
1.96x →2.18x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.2 pp over 3 years. Driven by net margin declining (27.9% → 0.7%), asset turnover improving (0.19x → 0.95x), leverage rising (1.96x → 2.18x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 27.9% | 0.19 | 1.96 | 10.6% |
| FY2024 | ₹0Cr | ₹0Cr | 0.4% | 0.21 | 2.12 | 0.2% |
| FY2025 | ₹0Cr | ₹0Cr | 0.7% | 0.95 | 2.18 | 1.4% |
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.