DuPont Decomposition
Why does SUNDARMFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 44.6% × 0.06 × 5.71
Latest: FY2025
Profitability
Net Margin
44.6%
34.3% →44.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.06x
0.03x →0.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.71x
4.44x →5.71x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.2 pp over 3 years. Driven by net margin improving (34.3% → 44.6%), leverage rising (4.44x → 5.71x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 34.3% | 0.03 | 4.44 | 4.0% |
| FY2024 | ₹0Cr | ₹0Cr | 21.9% | 0.03 | 5.80 | 4.3% |
| FY2025 | ₹0Cr | ₹0Cr | 44.6% | 0.06 | 5.71 | 14.2% |
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.