DuPont Decomposition
Why does STEELCAS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.2% = 19.6% × 0.95 × 1.19
Latest: FY2025
Profitability
Net Margin
19.6%
11.2% →19.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
1.07x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.19x
1.76x →1.19x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~22%. Driven by net margin improving (11.2% → 19.6%), asset turnover declining (1.07x → 0.95x), leverage falling (1.76x → 1.19x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.2% | 1.07 | 1.76 | 21.3% |
| FY2023 | ₹0Cr | ₹0Cr | 15.2% | 1.52 | 1.42 | 32.8% |
| FY2024 | ₹0Cr | ₹0Cr | 18.7% | 1.24 | 1.20 | 27.8% |
| FY2025 | ₹0Cr | ₹0Cr | 19.6% | 0.95 | 1.19 | 22.2% |
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.