DuPont Decomposition
Why does SHRADHA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.7% = 17.3% × 0.27 × 2.11
Latest: FY2025
Profitability
Net Margin
17.3%
81.7% →17.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.27x
0.01x →0.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.11x
4.21x →2.11x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.3 pp over 4 years. Driven by net margin declining (81.7% → 17.3%), asset turnover improving (0.01x → 0.27x), leverage falling (4.21x → 2.11x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 81.7% | 0.01 | 4.21 | 2.4% |
| FY2023 | ₹0Cr | ₹0Cr | 15.7% | 0.36 | 3.42 | 19.3% |
| FY2024 | ₹0Cr | ₹0Cr | 16.9% | 0.38 | 3.09 | 20.0% |
| FY2025 | ₹0Cr | ₹0Cr | 17.3% | 0.27 | 2.11 | 9.7% |
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.