DuPont Decomposition
Why does SBCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.0% = 15.2% × 1.00 × 1.25
Latest: FY2025
Profitability
Net Margin
15.2%
16.8% →15.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.00x
1.21x →1.00x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.47x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.8 pp over 3 years. Driven by net margin declining (16.8% → 15.2%), asset turnover declining (1.21x → 1.00x), leverage falling (1.47x → 1.25x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.8% | 1.21 | 1.47 | 29.8% |
| FY2024 | ₹0Cr | ₹0Cr | 16.6% | 1.15 | 1.30 | 24.7% |
| FY2025 | ₹0Cr | ₹0Cr | 15.2% | 1.00 | 1.25 | 19.0% |
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.