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
5.8% = 3.5% × 0.79 × 2.11
Latest: FY2025
Profitability
Net Margin
3.5%
0.2% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
0.21x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.11x
2.09x →2.11x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.6 pp over 3 years. Driven by net margin improving (0.2% → 3.5%), asset turnover improving (0.21x → 0.79x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 0.2% | 0.21 | 2.09 | 0.1% |
| FY2024 | ₹0Cr | ₹0Cr | 6.3% | 0.22 | 1.98 | 2.8% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 0.79 | 2.11 | 5.8% |
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.