DuPont Decomposition
Why does SPARC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-84.1% = -140.0% × 0.15 × 4.10
Latest: FY2024
Profitability
Net Margin
-140.0%
-34.3% →-140.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.15x
0.29x →0.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.10x
1.62x →4.10x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 68.1 pp over 2 years. Driven by net margin declining (-34.3% → -140.0%), asset turnover declining (0.29x → 0.15x), leverage rising (1.62x → 4.10x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -34.3% | 0.29 | 1.62 | -16.0% |
| FY2024 | ₹0Cr | ₹-0Cr | -140.0% | 0.15 | 4.10 | -84.1% |
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.