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
0.9% = 0.3% × 1.79 × 1.69
Latest: FY2026
Profitability
Net Margin
0.3%
1.4% →0.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.79x
2.31x →1.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.69x
1.87x →1.69x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.3 pp over 5 years. Driven by net margin declining (1.4% → 0.3%), asset turnover declining (2.31x → 1.79x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.4% | 2.31 | 1.87 | 6.2% |
| FY2023 | ₹0Cr | ₹0Cr | 1.6% | 3.11 | 2.01 | 9.8% |
| FY2024 | ₹0Cr | ₹0Cr | 1.7% | 3.04 | 1.99 | 10.2% |
| FY2025 | ₹0Cr | ₹-0Cr | -0.1% | 2.36 | 1.40 | -0.2% |
| FY2026 | ₹0Cr | ₹0Cr | 0.3% | 1.79 | 1.69 | 0.9% |
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.