DuPont Decomposition
Why does SKFINDIA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.0% = 7.1% × 1.81 × 1.56
Latest: FY2026
Profitability
Net Margin
7.1%
11.0% →7.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.81x
1.38x →1.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.56x
1.39x →1.56x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~20%. Driven by net margin declining (11.0% → 7.1%), asset turnover improving (1.38x → 1.81x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.0% | 1.38 | 1.39 | 20.9% |
| FY2023 | ₹0Cr | ₹0Cr | 12.4% | 1.33 | 1.36 | 22.4% |
| FY2024 | ₹0Cr | ₹0Cr | 12.3% | 1.23 | 1.36 | 20.6% |
| FY2025 | ₹0Cr | ₹0Cr | 11.5% | 1.38 | 1.37 | 21.8% |
| FY2026 | ₹0Cr | ₹0Cr | 7.1% | 1.81 | 1.56 | 20.0% |
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.