DuPont Decomposition
Why does SMLMAH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
31.8% = 5.1% × 1.83 × 3.40
Latest: FY2025
Profitability
Net Margin
5.1%
1.5% →5.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.83x
1.93x →1.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.40x
5.26x →3.40x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.8 pp over 3 years. Driven by net margin improving (1.5% → 5.1%), leverage falling (5.26x → 3.40x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.5% | 1.93 | 5.26 | 15.1% |
| FY2024 | ₹0Cr | ₹0Cr | 4.9% | 1.80 | 4.25 | 37.8% |
| FY2025 | ₹0Cr | ₹0Cr | 5.1% | 1.83 | 3.40 | 31.8% |
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.