DuPont Decomposition
Why does SONAMLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.1% = 6.1% × 1.06 × 1.55
Latest: FY2025
Profitability
Net Margin
6.1%
3.9% →6.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.06x
0.96x →1.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
1.89x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.0 pp over 4 years. Driven by net margin improving (3.9% → 6.1%), asset turnover improving (0.96x → 1.06x), leverage falling (1.89x → 1.55x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.9% | 0.96 | 1.89 | 7.0% |
| FY2023 | ₹0Cr | ₹0Cr | 4.9% | 0.96 | 1.64 | 7.7% |
| FY2024 | ₹0Cr | ₹0Cr | 6.3% | 1.01 | 1.52 | 9.7% |
| FY2025 | ₹0Cr | ₹0Cr | 6.1% | 1.06 | 1.55 | 10.1% |
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.