DuPont Decomposition
Why does SREEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.9% = 10.3% × 0.45 × 1.05
Latest: FY2025
Profitability
Net Margin
10.3%
13.6% →10.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.45x
0.34x →0.45x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.05x
1.05x →1.05x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~5%. Driven by net margin declining (13.6% → 10.3%), asset turnover improving (0.34x → 0.45x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.6% | 0.34 | 1.05 | 4.9% |
| FY2023 | ₹0Cr | ₹0Cr | 12.8% | 0.51 | 1.06 | 6.9% |
| FY2024 | ₹0Cr | ₹0Cr | 12.3% | 0.50 | 1.05 | 6.4% |
| FY2025 | ₹0Cr | ₹0Cr | 10.3% | 0.45 | 1.05 | 4.9% |
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.