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
6.0% = 8.3% × 0.44 × 1.67
Latest: FY2025
Profitability
Net Margin
8.3%
-1.5% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.44x
0.27x →0.44x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.67x
2.91x →1.67x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.2 pp over 4 years. Driven by net margin improving (-1.5% → 8.3%), asset turnover improving (0.27x → 0.44x), leverage falling (2.91x → 1.67x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -1.5% | 0.27 | 2.91 | -1.2% |
| FY2023 | ₹0Cr | ₹0Cr | 7.7% | 0.36 | 3.10 | 8.7% |
| FY2024 | ₹0Cr | ₹0Cr | 5.1% | 0.66 | 2.66 | 8.9% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.44 | 1.67 | 6.0% |
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.