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
15.1% = 21.0% × 0.57 × 1.27
Latest: FY2025
Profitability
Net Margin
21.0%
18.1% →21.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.57x
0.14x →0.57x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.27x
1.44x →1.27x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.5 pp over 3 years. Driven by net margin improving (18.1% → 21.0%), asset turnover improving (0.14x → 0.57x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 18.1% | 0.14 | 1.44 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 22.2% | 0.14 | 1.34 | 4.2% |
| FY2025 | ₹0Cr | ₹0Cr | 21.0% | 0.57 | 1.27 | 15.1% |
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.