DuPont Decomposition
Why does SRD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.4% = 2.8% × 3.12 × 1.18
Latest: FY2025
Profitability
Net Margin
2.8%
8.9% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
3.12x
2.88x →3.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.18x
1.37x →1.18x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 24.9 pp over 4 years. Driven by net margin declining (8.9% → 2.8%), asset turnover improving (2.88x → 3.12x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.9% | 2.88 | 1.37 | 35.3% |
| FY2023 | ₹0Cr | ₹0Cr | 4.9% | 2.94 | 1.19 | 17.2% |
| FY2024 | ₹0Cr | ₹0Cr | 2.3% | 2.72 | 1.07 | 6.6% |
| FY2025 | ₹0Cr | ₹0Cr | 2.8% | 3.12 | 1.18 | 10.4% |
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.