DuPont Decomposition
Why does SBICARD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.9% = 13.4% × 0.22 × 4.76
Latest: FY2025
Profitability
Net Margin
13.4%
15.8% →13.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.22x
0.08x →0.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.76x
4.63x →4.76x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.8 pp over 3 years. Driven by net margin declining (15.8% → 13.4%), asset turnover improving (0.08x → 0.22x). 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 | 15.8% | 0.08 | 4.63 | 6.1% |
| FY2024 | ₹0Cr | ₹0Cr | 15.2% | 0.07 | 4.81 | 5.5% |
| FY2025 | ₹0Cr | ₹0Cr | 13.4% | 0.22 | 4.76 | 13.9% |
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.