DuPont Decomposition
Why does SMSPHARMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.0% = 11.5% × 0.65 × 1.73
Latest: FY2026
Profitability
Net Margin
11.5%
12.1% →11.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.65x
0.60x →0.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.73x
1.83x →1.73x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~13%.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.1% | 0.60 | 1.83 | 13.2% |
| FY2023 | ₹0Cr | ₹-0Cr | -1.4% | 0.59 | 1.91 | -1.5% |
| FY2024 | ₹0Cr | ₹0Cr | 7.0% | 0.68 | 1.93 | 9.3% |
| FY2025 | ₹0Cr | ₹0Cr | 8.8% | 0.68 | 1.80 | 10.8% |
| FY2026 | ₹0Cr | ₹0Cr | 11.5% | 0.65 | 1.73 | 13.0% |
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.