DuPont Decomposition
Why does SIGMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
38.6% = 25.1% × 1.24 × 1.24
Latest: FY2025
Profitability
Net Margin
25.1%
21.8% →25.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.24x
1.09x →1.24x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.24x
1.19x →1.24x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.3 pp over 4 years. Driven by net margin improving (21.8% → 25.1%), asset turnover improving (1.09x → 1.24x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 21.8% | 1.09 | 1.19 | 28.3% |
| FY2023 | ₹0Cr | ₹0Cr | 21.1% | 0.87 | 1.22 | 22.4% |
| FY2024 | ₹0.1Cr | ₹0Cr | 23.2% | 0.34 | 1.51 | 11.8% |
| FY2025 | ₹0Cr | ₹0Cr | 25.1% | 1.24 | 1.24 | 38.6% |
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.