DuPont Decomposition
Why does SMARTLINK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.4% = 3.1% × 0.85 × 1.25
Latest: FY2025
Profitability
Net Margin
3.1%
13.4% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.85x
0.37x →0.85x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.27x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.9 pp over 4 years. Driven by net margin declining (13.4% → 3.1%), asset turnover improving (0.37x → 0.85x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.4% | 0.37 | 1.27 | 6.3% |
| FY2023 | ₹0Cr | ₹0Cr | 12.3% | 0.59 | 1.45 | 10.5% |
| FY2024 | ₹0Cr | ₹0Cr | 3.6% | 0.71 | 1.43 | 3.7% |
| FY2025 | ₹0Cr | ₹0Cr | 3.1% | 0.85 | 1.25 | 3.4% |
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.