DuPont Decomposition
Why does SMLT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.4% = 2.3% × 1.42 × 1.04
Latest: FY2025
Profitability
Net Margin
2.3%
6.0% →2.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.42x
3.92x →1.42x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.04x
1.49x →1.04x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 31.8 pp over 4 years. Driven by net margin declining (6.0% → 2.3%), asset turnover declining (3.92x → 1.42x), leverage falling (1.49x → 1.04x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.0% | 3.92 | 1.49 | 35.3% |
| FY2023 | ₹0Cr | ₹0Cr | 7.3% | 3.69 | 1.05 | 28.4% |
| FY2024 | ₹0Cr | ₹0Cr | 4.5% | 2.53 | 1.03 | 11.9% |
| FY2025 | ₹0Cr | ₹0Cr | 2.3% | 1.42 | 1.04 | 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.