DuPont Decomposition
Why does SGIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.7% = 4.8% × 1.04 × 3.18
Latest: FY2025
Profitability
Net Margin
4.8%
1.2% →4.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.04x
1.57x →1.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.18x
5.18x →3.18x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.9 pp over 3 years. Driven by net margin improving (1.2% → 4.8%), asset turnover declining (1.57x → 1.04x), leverage falling (5.18x → 3.18x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.2% | 1.57 | 5.18 | 9.8% |
| FY2024 | ₹0Cr | ₹0Cr | 3.6% | 1.63 | 4.24 | 24.8% |
| FY2025 | ₹0Cr | ₹0Cr | 4.8% | 1.04 | 3.18 | 15.7% |
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.