DuPont Decomposition
Why does SCPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.6% = 5.2% × 1.28 × 1.91
Latest: FY2025
Profitability
Net Margin
5.2%
5.6% →5.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.28x
1.67x →1.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.91x
2.68x →1.91x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.4 pp over 4 years. Driven by asset turnover declining (1.67x → 1.28x), leverage falling (2.68x → 1.91x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.6% | 1.67 | 2.68 | 25.0% |
| FY2023 | ₹0Cr | ₹0Cr | 6.1% | 0.27 | 2.42 | 4.0% |
| FY2024 | ₹0Cr | ₹0Cr | 8.4% | 0.36 | 2.05 | 6.2% |
| FY2025 | ₹0Cr | ₹0Cr | 5.2% | 1.28 | 1.91 | 12.6% |
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.