DuPont Decomposition
Why does SHAHALLOYS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-165.8% = -3.1% × 2.30 × 22.88
Latest: FY2024
Profitability
Net Margin
-3.1%
9.3% →-3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.30x
2.74x →2.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
22.88x
9.73x →22.88x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 414.1 pp over 3 years. Driven by net margin declining (9.3% → -3.1%), asset turnover declining (2.74x → 2.30x), leverage rising (9.73x → 22.88x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.3% | 2.74 | 9.73 | 248.3% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.5% | 2.08 | 9.87 | -10.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -3.1% | 2.30 | 22.88 | -165.8% |
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.