DuPont Decomposition
Why does UGARSUGAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-7.5% = -1.2% × 1.18 × 5.23
Latest: FY2025
Profitability
Net Margin
-1.2%
3.6% →-1.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.18x
1.96x →1.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.23x
4.15x →5.23x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 37.1 pp over 3 years. Driven by net margin declining (3.6% → -1.2%), asset turnover declining (1.96x → 1.18x), leverage rising (4.15x → 5.23x). 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 | 3.6% | 1.96 | 4.15 | 29.6% |
| FY2024 | ₹0Cr | ₹0Cr | 1.5% | 1.06 | 4.62 | 7.4% |
| FY2025 | ₹0Cr | ₹-0Cr | -1.2% | 1.18 | 5.23 | -7.5% |
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.