DuPont Decomposition
Why does SOLEX earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
26.0% = 6.3% × 1.38 × 2.97
Latest: FY2025
Profitability
Net Margin
6.3%
1.4% →6.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.38x
0.99x →1.38x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.97x
2.08x →2.97x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 23.2 pp over 4 years. Driven by net margin improving (1.4% → 6.3%), asset turnover improving (0.99x → 1.38x), leverage rising (2.08x → 2.97x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.4% | 0.99 | 2.08 | 2.8% |
| FY2023 | ₹0Cr | ₹0Cr | 1.7% | 1.15 | 3.74 | 7.2% |
| FY2024 | ₹0Cr | ₹0Cr | 2.4% | 1.73 | 4.58 | 18.9% |
| FY2025 | ₹0Cr | ₹0Cr | 6.3% | 1.38 | 2.97 | 26.0% |
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.