DuPont Decomposition
Why does STERTOOLS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.6% = 3.5% × 1.01 × 1.56
Latest: FY2026
Profitability
Net Margin
3.5%
5.1% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
0.88x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.56x
1.59x →1.56x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.6 pp over 5 years. Driven by net margin declining (5.1% → 3.5%), asset turnover improving (0.88x → 1.01x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.1% | 0.88 | 1.59 | 7.2% |
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 1.16 | 1.64 | 12.0% |
| FY2024 | ₹0Cr | ₹0Cr | 6.0% | 1.29 | 1.59 | 12.4% |
| FY2025 | ₹0Cr | ₹0Cr | 5.7% | 1.30 | 1.58 | 11.7% |
| FY2026 | ₹0Cr | ₹0Cr | 3.5% | 1.01 | 1.56 | 5.6% |
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.