DuPont Decomposition
Why does SUNPHARMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.7% = 19.7% × 0.54 × 1.30
Latest: FY2026
Profitability
Net Margin
19.7%
8.5% →19.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.54x
0.55x →0.54x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.30x
1.45x →1.30x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.9 pp over 5 years. Driven by net margin improving (8.5% → 19.7%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.5% | 0.55 | 1.45 | 6.8% |
| FY2023 | ₹0Cr | ₹0Cr | 19.6% | 0.54 | 1.44 | 15.1% |
| FY2024 | ₹0Cr | ₹0Cr | 20.1% | 0.56 | 1.34 | 15.0% |
| FY2025 | ₹0Cr | ₹0Cr | 21.0% | 0.57 | 1.28 | 15.1% |
| FY2026 | ₹0Cr | ₹0Cr | 19.7% | 0.54 | 1.30 | 13.7% |
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.