DuPont Decomposition
Why does STANLEY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.6% = 2.9% × 0.47 × 1.91
Latest: FY2026
Profitability
Net Margin
2.9%
7.3% →2.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.47x
0.69x →0.47x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.91x
2.11x →1.91x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.1 pp over 5 years. Driven by net margin declining (7.3% → 2.9%), asset turnover declining (0.69x → 0.47x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.3% | 0.69 | 2.11 | 10.7% |
| FY2023 | ₹0Cr | ₹0Cr | 7.9% | 0.91 | 2.12 | 15.2% |
| FY2024 | ₹0Cr | ₹0Cr | 7.0% | 0.76 | 2.28 | 12.2% |
| FY2025 | ₹0Cr | ₹0Cr | 6.8% | 0.57 | 1.60 | 6.3% |
| FY2026 | ₹0Cr | ₹0Cr | 2.9% | 0.47 | 1.91 | 2.6% |
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.