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
6.8% = 3.0% × 1.61 × 1.42
Latest: FY2025
Profitability
Net Margin
3.0%
6.3% →3.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.61x
1.59x →1.61x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.42x
1.56x →1.42x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.8 pp over 3 years. Driven by net margin declining (6.3% → 3.0%).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| 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% |
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.