DuPont Decomposition
Why does SUMICHEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.4% = 16.2% × 0.79 × 1.36
Latest: FY2025
Profitability
Net Margin
16.2%
14.5% →16.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
1.03x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.36x
1.41x →1.36x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.7 pp over 3 years. Driven by net margin improving (14.5% → 16.2%), asset turnover declining (1.03x → 0.79x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.5% | 1.03 | 1.41 | 21.1% |
| FY2024 | ₹0Cr | ₹0Cr | 13.1% | 0.85 | 1.36 | 15.1% |
| FY2025 | ₹0Cr | ₹0Cr | 16.2% | 0.79 | 1.36 | 17.4% |
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.