DuPont Decomposition
Why does SPIC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.0% = 35.3% × 0.19 × 1.91
Latest: FY2025
Profitability
Net Margin
35.3%
3.8% →35.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.19x
0.31x →0.19x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.91x
2.23x →1.91x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.4 pp over 3 years. Driven by net margin improving (3.8% → 35.3%), asset turnover declining (0.31x → 0.19x), leverage falling (2.23x → 1.91x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.8% | 0.31 | 2.23 | 2.6% |
| FY2024 | ₹0Cr | ₹-0Cr | -19.4% | 0.07 | 1.64 | -2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 35.3% | 0.19 | 1.91 | 13.0% |
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.