DuPont Decomposition
Why does SUDARSCHEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.4% = 1.7% × 0.34 × 2.41
Latest: FY2025
Profitability
Net Margin
1.7%
4.7% →1.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.34x
0.29x →0.34x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.41x
2.89x →2.41x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.6 pp over 3 years. Driven by net margin declining (4.7% → 1.7%), leverage falling (2.89x → 2.41x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 0.29 | 2.89 | 3.9% |
| FY2024 | ₹0Cr | ₹0Cr | 7.6% | 0.32 | 2.05 | 5.0% |
| FY2025 | ₹0Cr | ₹0Cr | 1.7% | 0.34 | 2.41 | 1.4% |
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.