DuPont Decomposition
Why does SPECTRUM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.4% = 6.6% × 0.87 × 2.34
Latest: FY2025
Profitability
Net Margin
6.6%
3.0% →6.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
1.15x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.34x
2.61x →2.34x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.3 pp over 4 years. Driven by net margin improving (3.0% → 6.6%), asset turnover declining (1.15x → 0.87x), leverage falling (2.61x → 2.34x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.0% | 1.15 | 2.61 | 9.2% |
| FY2023 | ₹0Cr | ₹0Cr | 3.3% | 1.00 | 2.88 | 9.6% |
| FY2024 | ₹0Cr | ₹0Cr | 6.2% | 0.99 | 1.93 | 11.8% |
| FY2025 | ₹0Cr | ₹0Cr | 6.6% | 0.87 | 2.34 | 13.4% |
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.