DuPont Decomposition
Why does SGMART earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.6% = 1.8% × 2.55 × 1.90
Latest: FY2025
Profitability
Net Margin
1.8%
804.0% →1.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.55x
0.00x →2.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.90x
1.14x →1.90x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.1 pp over 4 years. Driven by net margin declining (804.0% → 1.8%), asset turnover improving (0.00x → 2.55x), leverage rising (1.14x → 1.90x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 804.0% | 0.00 | 1.14 | 2.5% |
| FY2023 | ₹0Cr | ₹0Cr | 12.6% | 0.13 | 1.00 | 1.6% |
| FY2024 | ₹0Cr | ₹0Cr | 2.3% | 1.80 | 1.37 | 5.6% |
| FY2025 | ₹0Cr | ₹0Cr | 1.8% | 2.55 | 1.90 | 8.6% |
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.