DuPont Decomposition
Why does SHRIRAMFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.9% = 43.1% × 0.08 × 5.20
Latest: FY2025
Profitability
Net Margin
43.1%
16.2% →43.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.08x
0.04x →0.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.20x
4.81x →5.20x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.0 pp over 3 years. Driven by net margin improving (16.2% → 43.1%), leverage rising (4.81x → 5.20x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.2% | 0.04 | 4.81 | 2.9% |
| FY2024 | ₹0Cr | ₹0Cr | 20.4% | 0.04 | 5.00 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 43.1% | 0.08 | 5.20 | 16.9% |
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.