DuPont Decomposition
Why does SOTL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.0% = 4.2% × 1.60 × 1.49
Latest: FY2026
Profitability
Net Margin
4.2%
8.9% →4.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.60x
1.46x →1.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.49x
1.58x →1.49x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.7 pp over 5 years. Driven by net margin declining (8.9% → 4.2%), asset turnover improving (1.46x → 1.60x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.9% | 1.46 | 1.58 | 20.7% |
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 1.59 | 1.56 | 15.6% |
| FY2024 | ₹0Cr | ₹0Cr | 5.4% | 1.50 | 1.53 | 12.4% |
| FY2025 | ₹0Cr | ₹0Cr | 3.0% | 1.61 | 1.42 | 6.8% |
| FY2026 | ₹0Cr | ₹0Cr | 4.2% | 1.60 | 1.49 | 10.0% |
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.