DuPont Decomposition
Why does SHARDAMOTR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
29.7% = 11.2% × 1.60 × 1.65
Latest: FY2025
Profitability
Net Margin
11.2%
7.8% →11.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.60x
1.92x →1.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
1.83x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.2 pp over 3 years. Driven by net margin improving (7.8% → 11.2%), asset turnover declining (1.92x → 1.60x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 1.92 | 1.83 | 27.5% |
| FY2024 | ₹0Cr | ₹0Cr | 10.8% | 1.71 | 1.62 | 29.8% |
| FY2025 | ₹0Cr | ₹0Cr | 11.2% | 1.60 | 1.65 | 29.7% |
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.