DuPont Decomposition
Why does SHRIRAMPPS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.7% = 9.4% × 0.21 × 2.91
Latest: FY2025
Profitability
Net Margin
9.4%
2.6% →9.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.21x
0.10x →0.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.91x
3.21x →2.91x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.8 pp over 4 years. Driven by net margin improving (2.6% → 9.4%), asset turnover improving (0.10x → 0.21x), leverage falling (3.21x → 2.91x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.6% | 0.10 | 3.21 | 0.9% |
| FY2023 | ₹0Cr | ₹0Cr | 10.2% | 0.18 | 3.03 | 5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 8.9% | 0.22 | 2.96 | 5.9% |
| FY2025 | ₹0Cr | ₹0Cr | 9.4% | 0.21 | 2.91 | 5.7% |
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.