DuPont Decomposition
Why does SETL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.0% = 10.5% × 0.64 × 1.34
Latest: FY2025
Profitability
Net Margin
10.5%
10.5% →10.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.80x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
4.32x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 27.4 pp over 4 years. Driven by asset turnover declining (0.80x → 0.64x), leverage falling (4.32x → 1.34x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.5% | 0.80 | 4.32 | 36.5% |
| FY2023 | ₹0Cr | ₹0Cr | 10.8% | 1.43 | 2.23 | 34.3% |
| FY2024 | ₹0Cr | ₹0Cr | 10.8% | 0.82 | 1.63 | 14.3% |
| FY2025 | ₹0Cr | ₹0Cr | 10.5% | 0.64 | 1.34 | 9.0% |
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.