DuPont Decomposition
Why does SERVOTECH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.8% = 4.8% × 1.65 × 1.72
Latest: FY2025
Profitability
Net Margin
4.8%
5.3% →4.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.65x
0.69x →1.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.72x
2.03x →1.72x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.4 pp over 3 years. Driven by asset turnover improving (0.69x → 1.65x), leverage falling (2.03x → 1.72x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.3% | 0.69 | 2.03 | 7.4% |
| FY2024 | ₹0Cr | ₹0Cr | 2.5% | 0.49 | 1.95 | 2.4% |
| FY2025 | ₹0Cr | ₹0Cr | 4.8% | 1.65 | 1.72 | 13.8% |
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.