DuPont Decomposition
Why does SIGNATURE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
59.2% = 42.2% × 0.15 × 9.33
Latest: FY2026
Profitability
Net Margin
42.2%
-4.1% →42.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.15x
0.26x →0.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.33x
126.19x →9.33x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 193.5 pp over 4 years. Driven by net margin improving (-4.1% → 42.2%), asset turnover declining (0.26x → 0.15x), leverage falling (126.19x → 9.33x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -4.1% | 0.26 | 126.19 | -134.3% |
| FY2024 | ₹0Cr | ₹0Cr | 1.3% | 0.14 | 13.52 | 2.6% |
| FY2025 | ₹0Cr | ₹0Cr | 4.0% | 0.19 | 17.70 | 13.9% |
| FY2026 | ₹0Cr | ₹0Cr | 42.2% | 0.15 | 9.33 | 59.2% |
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.