DuPont Decomposition
Why does STAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.9% = 11.4% × 0.70 × 2.23
Latest: FY2026
Profitability
Net Margin
11.4%
-15.2% →11.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.70x
0.43x →0.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.23x
2.96x →2.23x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 37.4 pp over 5 years. Driven by net margin improving (-15.2% → 11.4%), asset turnover improving (0.43x → 0.70x), leverage falling (2.96x → 2.23x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -15.2% | 0.43 | 2.96 | -19.5% |
| FY2023 | ₹0Cr | ₹-0Cr | -5.6% | 0.54 | 3.00 | -9.2% |
| FY2024 | ₹0Cr | ₹-0Cr | -1.9% | 0.64 | 2.75 | -3.3% |
| FY2025 | ₹0Cr | ₹0Cr | 78.7% | 0.75 | 2.37 | 140.8% |
| FY2026 | ₹0Cr | ₹0Cr | 11.4% | 0.70 | 2.23 | 17.9% |
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.