DuPont Decomposition
Why does SUMIT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.2% = 8.3% × 0.44 × 1.98
Latest: FY2025
Profitability
Net Margin
8.3%
-7.6% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.44x
0.30x →0.44x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.98x
3.96x →1.98x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.2 pp over 4 years. Driven by net margin improving (-7.6% → 8.3%), asset turnover improving (0.30x → 0.44x), leverage falling (3.96x → 1.98x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -7.6% | 0.30 | 3.96 | -9.0% |
| FY2023 | ₹0Cr | ₹0Cr | 6.9% | 0.37 | 4.08 | 10.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.7% | 0.63 | 3.75 | 13.6% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.44 | 1.98 | 7.2% |
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.