DuPont Decomposition
Why does SUNDARAM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-5.8% = -4.0% × 1.05 × 1.39
Latest: FY2025
Profitability
Net Margin
-4.0%
5.6% →-4.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
0.48x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.39x
1.54x →1.39x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.0 pp over 4 years. Driven by net margin declining (5.6% → -4.0%), asset turnover improving (0.48x → 1.05x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.6% | 0.48 | 1.54 | 4.1% |
| FY2023 | ₹0Cr | ₹0Cr | 2.3% | 0.83 | 1.41 | 2.6% |
| FY2024 | ₹0Cr | ₹-0Cr | -4.0% | 0.94 | 1.45 | -5.5% |
| FY2025 | ₹0Cr | ₹-0Cr | -4.0% | 1.05 | 1.39 | -5.8% |
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.