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
6.1% = 6.9% × 0.57 × 1.57
Latest: FY2025
Profitability
Net Margin
6.9%
7.3% →6.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.57x
0.69x →0.57x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.57x
2.05x →1.57x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.3 pp over 4 years. Driven by asset turnover declining (0.69x → 0.57x), leverage falling (2.05x → 1.57x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.3% | 0.69 | 2.05 | 10.4% |
| FY2023 | ₹0Cr | ₹0Cr | 7.9% | 0.91 | 2.05 | 14.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.0% | 0.76 | 2.28 | 12.2% |
| FY2025 | ₹0Cr | ₹0Cr | 6.9% | 0.57 | 1.57 | 6.1% |
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.