DuPont Decomposition
Why does SKMEGGPROD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.4% = 7.0% × 1.01 × 1.63
Latest: FY2025
Profitability
Net Margin
7.0%
11.5% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
1.99x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.63x
1.71x →1.63x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 27.6 pp over 3 years. Driven by net margin declining (11.5% → 7.0%), asset turnover declining (1.99x → 1.01x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.5% | 1.99 | 1.71 | 39.0% |
| FY2024 | ₹0Cr | ₹0Cr | 12.2% | 1.49 | 1.69 | 30.8% |
| FY2025 | ₹0Cr | ₹0Cr | 7.0% | 1.01 | 1.63 | 11.4% |
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.