DuPont Decomposition
Why does SENCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.1% = 2.5% × 1.33 × 2.41
Latest: FY2025
Profitability
Net Margin
2.5%
3.7% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.33x
1.68x →1.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.41x
2.89x →2.41x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.7 pp over 4 years. Driven by net margin declining (3.7% → 2.5%), asset turnover declining (1.68x → 1.33x), leverage falling (2.89x → 2.41x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.7% | 1.68 | 2.89 | 17.8% |
| FY2023 | ₹0Cr | ₹0Cr | 3.9% | 1.40 | 3.07 | 16.8% |
| FY2024 | ₹0Cr | ₹0Cr | 2.8% | 0.31 | 2.73 | 2.4% |
| FY2025 | ₹0Cr | ₹0Cr | 2.5% | 1.33 | 2.41 | 8.1% |
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.