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
11.7% = 5.7% × 1.29 × 1.58
Latest: FY2025
Profitability
Net Margin
5.7%
5.1% →5.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.29x
0.88x →1.29x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.58x
1.59x →1.58x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.5 pp over 4 years. Driven by asset turnover improving (0.88x → 1.29x).
Historical Decomposition
Last 4 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% | 1.29 | 1.58 | 11.7% |
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.