DuPont Decomposition
Why does SRF earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.1% = 11.9% × 0.64 × 1.72
Latest: FY2026
Profitability
Net Margin
11.9%
15.3% →11.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.78x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.72x
1.84x →1.72x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.0 pp over 5 years. Driven by net margin declining (15.3% → 11.9%), asset turnover declining (0.78x → 0.64x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.3% | 0.78 | 1.84 | 22.1% |
| FY2023 | ₹0Cr | ₹0Cr | 14.8% | 0.78 | 1.82 | 20.9% |
| FY2024 | ₹0Cr | ₹0Cr | 10.3% | 0.63 | 1.78 | 11.6% |
| FY2025 | ₹0Cr | ₹0Cr | 8.7% | 0.67 | 1.71 | 9.9% |
| FY2026 | ₹0Cr | ₹0Cr | 11.9% | 0.64 | 1.72 | 13.1% |
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.