DuPont Decomposition
Why does SHK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.1% = 2.9% × 0.81 × 2.14
Latest: FY2026
Profitability
Net Margin
2.9%
9.5% →2.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
0.68x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.14x
2.27x →2.14x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.6 pp over 5 years. Driven by net margin declining (9.5% → 2.9%), asset turnover improving (0.68x → 0.81x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.5% | 0.68 | 2.27 | 14.7% |
| FY2023 | ₹0Cr | ₹0Cr | 3.6% | 0.75 | 2.09 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 6.7% | 0.76 | 1.98 | 10.1% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 0.79 | 2.11 | 5.8% |
| FY2026 | ₹0Cr | ₹0Cr | 2.9% | 0.81 | 2.14 | 5.1% |
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.