DuPont Decomposition
Why does SHAKTIPUMP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
35.2% = 16.5% × 1.26 × 1.70
Latest: FY2025
Profitability
Net Margin
16.5%
2.6% →16.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.26x
0.26x →1.26x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.70x
1.83x →1.70x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 33.9 pp over 3 years. Driven by net margin improving (2.6% → 16.5%), asset turnover improving (0.26x → 1.26x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.6% | 0.26 | 1.83 | 1.3% |
| FY2024 | ₹0Cr | ₹0Cr | 14.7% | 0.42 | 1.92 | 11.9% |
| FY2025 | ₹0Cr | ₹0Cr | 16.5% | 1.26 | 1.70 | 35.2% |
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.