DuPont Decomposition
Why does SIKKO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.9% = 7.8% × 0.57 × 1.33
Latest: FY2026
Profitability
Net Margin
7.8%
3.7% →7.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.57x
1.38x →0.57x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
1.73x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.9 pp over 5 years. Driven by net margin improving (3.7% → 7.8%), asset turnover declining (1.38x → 0.57x), leverage falling (1.73x → 1.33x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.7% | 1.38 | 1.73 | 8.9% |
| FY2023 | ₹0Cr | ₹0Cr | 5.8% | 1.09 | 1.91 | 12.2% |
| FY2024 | ₹0Cr | ₹0Cr | 6.6% | 1.19 | 1.85 | 14.6% |
| FY2025 | ₹0Cr | ₹0Cr | 6.9% | 0.57 | 1.33 | 5.3% |
| FY2026 | ₹0Cr | ₹0Cr | 7.8% | 0.57 | 1.33 | 5.9% |
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.