DuPont Decomposition
Why does SCI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.2% = 15.1% × 0.48 × 1.41
Latest: FY2025
Profitability
Net Margin
15.1%
26.8% →15.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.48x
0.12x →0.48x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.41x
1.66x →1.41x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.7 pp over 3 years. Driven by net margin declining (26.8% → 15.1%), asset turnover improving (0.12x → 0.48x), leverage falling (1.66x → 1.41x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 26.8% | 0.12 | 1.66 | 5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 21.8% | 0.12 | 1.60 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 15.1% | 0.48 | 1.41 | 10.2% |
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.