DuPont Decomposition
Why does STOVEKRAFT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.2% = 2.7% × 1.18 × 2.56
Latest: FY2025
Profitability
Net Margin
2.7%
2.8% →2.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.18x
1.40x →1.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.56x
2.22x →2.56x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~8%. Driven by asset turnover declining (1.40x → 1.18x), leverage rising (2.22x → 2.56x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.8% | 1.40 | 2.22 | 8.9% |
| FY2024 | ₹0Cr | ₹0Cr | 2.5% | 1.22 | 2.50 | 7.8% |
| FY2025 | ₹0Cr | ₹0Cr | 2.7% | 1.18 | 2.56 | 8.2% |
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.