DuPont Decomposition
Why does SHREDIGCEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.9% = 3.5% × 1.04 × 1.91
Latest: FY2025
Profitability
Net Margin
3.5%
12.5% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.04x
0.42x →1.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.91x
1.44x →1.91x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~7%. Driven by net margin declining (12.5% → 3.5%), asset turnover improving (0.42x → 1.04x), leverage rising (1.44x → 1.91x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.5% | 0.42 | 1.44 | 7.5% |
| FY2024 | ₹0Cr | ₹0Cr | 14.1% | 0.42 | 1.40 | 8.3% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 1.04 | 1.91 | 6.9% |
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.