DuPont Decomposition
Why does SEPC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.6% = 4.2% × 0.25 × 1.58
Latest: FY2025
Profitability
Net Margin
4.2%
-5.3% →4.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.25x
0.19x →0.25x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.58x
1.84x →1.58x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.5 pp over 3 years. Driven by net margin improving (-5.3% → 4.2%), leverage falling (1.84x → 1.58x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -5.3% | 0.19 | 1.84 | -1.9% |
| FY2024 | ₹0Cr | ₹0Cr | 4.1% | 0.25 | 1.83 | 1.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.2% | 0.25 | 1.58 | 1.6% |
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.