DuPont Decomposition
Why does SHANKARA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.9% = 1.4% × 3.16 × 2.08
Latest: FY2025
Profitability
Net Margin
1.4%
1.6% →1.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
3.16x
3.11x →3.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.08x
2.01x →2.08x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~9%.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.6% | 3.11 | 2.01 | 9.8% |
| FY2024 | ₹0Cr | ₹0Cr | 1.7% | 3.69 | 2.17 | 13.5% |
| FY2025 | ₹0Cr | ₹0Cr | 1.4% | 3.16 | 2.08 | 8.9% |
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.