DuPont Decomposition
Why does SPECIALITY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.5% = 5.0% × 0.81 × 1.61
Latest: FY2025
Profitability
Net Margin
5.0%
3.2% →5.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
0.75x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.61x
2.33x →1.61x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~6%. Driven by net margin improving (3.2% → 5.0%), leverage falling (2.33x → 1.61x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.2% | 0.75 | 2.33 | 5.6% |
| FY2023 | ₹0Cr | ₹0Cr | 25.8% | 0.79 | 1.71 | 35.0% |
| FY2024 | ₹0Cr | ₹0Cr | 7.3% | 0.80 | 1.61 | 9.3% |
| FY2025 | ₹0Cr | ₹0Cr | 5.0% | 0.81 | 1.61 | 6.5% |
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.