DuPont Decomposition
Why does SPAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.7% = 6.4% × 0.99 × 1.68
Latest: FY2026
Profitability
Net Margin
6.4%
10.3% →6.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.99x
0.77x →0.99x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.68x
1.66x →1.68x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.6 pp over 5 years. Driven by net margin declining (10.3% → 6.4%), asset turnover improving (0.77x → 0.99x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.3% | 0.77 | 1.66 | 13.3% |
| FY2023 | ₹0Cr | ₹0Cr | 8.0% | 0.94 | 1.63 | 12.3% |
| FY2024 | ₹0Cr | ₹0Cr | 8.7% | 0.90 | 1.49 | 11.7% |
| FY2025 | ₹0Cr | ₹0Cr | 6.8% | 0.96 | 1.70 | 11.1% |
| FY2026 | ₹0Cr | ₹0Cr | 6.4% | 0.99 | 1.68 | 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.