DuPont Decomposition
Why does SATIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.3% = 8.3% × 0.19 × 4.56
Latest: FY2025
Profitability
Net Margin
8.3%
22.6% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.19x
0.06x →0.19x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.56x
4.82x →4.56x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.3 pp over 3 years. Driven by net margin declining (22.6% → 8.3%), asset turnover improving (0.06x → 0.19x), leverage falling (4.82x → 4.56x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 22.6% | 0.06 | 4.82 | 6.1% |
| FY2024 | ₹0Cr | ₹0Cr | 20.0% | 0.06 | 4.37 | 5.3% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.19 | 4.56 | 7.3% |
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.