DuPont Decomposition
Why does SHREERAMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
33.5% = 24.9% × 0.96 × 1.40
Latest: FY2025
Profitability
Net Margin
24.9%
8.0% →24.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.96x
0.35x →0.96x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
4.49x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 20.8 pp over 3 years. Driven by net margin improving (8.0% → 24.9%), asset turnover improving (0.35x → 0.96x), leverage falling (4.49x → 1.40x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.0% | 0.35 | 4.49 | 12.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.2% | 0.34 | 1.35 | 3.3% |
| FY2025 | ₹0Cr | ₹0Cr | 24.9% | 0.96 | 1.40 | 33.5% |
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.