DuPont Decomposition
Why does SIS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.5% = 0.1% × 2.16 × 2.54
Latest: FY2025
Profitability
Net Margin
0.1%
3.1% →0.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.16x
0.52x →2.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.54x
2.45x →2.54x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.5 pp over 3 years. Driven by net margin declining (3.1% → 0.1%), asset turnover improving (0.52x → 2.16x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.1% | 0.52 | 2.45 | 4.0% |
| FY2024 | ₹0Cr | ₹0Cr | 2.3% | 0.45 | 2.51 | 2.6% |
| FY2025 | ₹0Cr | ₹0Cr | 0.1% | 2.16 | 2.54 | 0.5% |
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.