DuPont Decomposition
Why does SBILIFE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 2.1% × 0.25 × 26.91
Latest: FY2025
Profitability
Net Margin
2.1%
1.8% →2.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.25x
0.30x →0.25x
Revenue per ₹ of assets
Leverage
Equity Multiplier
26.91x
23.52x →26.91x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.2 pp over 4 years. Driven by leverage rising (23.52x → 26.91x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.8% | 0.30 | 23.52 | 13.0% |
| FY2023 | ₹0Cr | ₹0Cr | 2.1% | 0.26 | 24.17 | 13.2% |
| FY2024 | ₹0Cr | ₹0Cr | 1.4% | 0.33 | 26.71 | 12.7% |
| FY2025 | ₹0Cr | ₹0Cr | 2.1% | 0.25 | 26.91 | 14.2% |
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.