DuPont Decomposition
Why does SONACOMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.7% = 14.4% × 0.60 × 1.25
Latest: FY2026
Profitability
Net Margin
14.4%
17.1% →14.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.60x
0.81x →0.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.30x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.4 pp over 5 years. Driven by net margin declining (17.1% → 14.4%), asset turnover declining (0.81x → 0.60x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 17.1% | 0.81 | 1.30 | 18.1% |
| FY2023 | ₹0Cr | ₹0Cr | 15.4% | 0.84 | 1.34 | 17.3% |
| FY2024 | ₹0Cr | ₹0Cr | 16.8% | 0.80 | 1.46 | 19.5% |
| FY2025 | ₹0Cr | ₹0Cr | 16.9% | 0.54 | 1.19 | 10.9% |
| FY2026 | ₹0Cr | ₹0Cr | 14.4% | 0.60 | 1.25 | 10.7% |
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.