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
15.2% = 38.4% × 0.08 × 4.88
Latest: FY2026
Profitability
Net Margin
38.4%
14.1% →38.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.08x
0.14x →0.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.88x
5.45x →4.88x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.8 pp over 5 years. Driven by net margin improving (14.1% → 38.4%), leverage falling (5.45x → 4.88x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.1% | 0.14 | 5.45 | 10.4% |
| FY2023 | ₹0Cr | ₹0Cr | 35.5% | 0.08 | 4.84 | 13.8% |
| FY2024 | ₹0Cr | ₹0Cr | 38.6% | 0.08 | 5.07 | 15.1% |
| FY2025 | ₹0Cr | ₹0Cr | 41.8% | 0.08 | 5.20 | 16.9% |
| FY2026 | ₹0Cr | ₹0Cr | 38.4% | 0.08 | 4.88 | 15.2% |
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.