DuPont Decomposition
Why does SONACOMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.7% = 17.6% × 0.52 × 1.16
Latest: FY2025
Profitability
Net Margin
17.6%
16.1% →17.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.52x
0.24x →0.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.16x
1.34x →1.16x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.4 pp over 3 years. Driven by net margin improving (16.1% → 17.6%), asset turnover improving (0.24x → 0.52x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.1% | 0.24 | 1.34 | 5.2% |
| FY2024 | ₹0Cr | ₹0Cr | 16.7% | 0.23 | 1.46 | 5.6% |
| FY2025 | ₹0Cr | ₹0Cr | 17.6% | 0.52 | 1.16 | 10.7% |
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.