DuPont Decomposition
Why does M&M earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.4% = 8.6% × 0.62 × 3.41
Latest: FY2026
Profitability
Net Margin
8.6%
7.4% →8.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.62x
0.51x →0.62x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.41x
3.69x →3.41x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.4 pp over 5 years. Driven by net margin improving (7.4% → 8.6%), asset turnover improving (0.51x → 0.62x), leverage falling (3.69x → 3.41x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.4% | 0.51 | 3.69 | 14.0% |
| FY2023 | ₹0Cr | ₹0Cr | 8.6% | 0.58 | 3.65 | 18.2% |
| FY2024 | ₹0Cr | ₹0Cr | 8.3% | 0.57 | 3.57 | 17.0% |
| FY2025 | ₹0Cr | ₹0Cr | 8.1% | 0.57 | 3.60 | 16.8% |
| FY2026 | ₹0Cr | ₹0Cr | 8.6% | 0.62 | 3.41 | 18.4% |
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.