DuPont Decomposition
Why does SWSOLAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.2% = 1.3% × 1.12 × 5.66
Latest: FY2025
Profitability
Net Margin
1.3%
-95.3% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.12x
0.04x →1.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.66x
3.47x →5.66x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 21.1 pp over 3 years. Driven by net margin improving (-95.3% → 1.3%), asset turnover improving (0.04x → 1.12x), leverage rising (3.47x → 5.66x). 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 | -95.3% | 0.04 | 3.47 | -12.9% |
| FY2024 | ₹0Cr | ₹0Cr | 0.1% | 0.27 | 4.44 | 0.1% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 1.12 | 5.66 | 8.2% |
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.