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
14.5% = 8.3% × 0.56 × 3.12
Latest: FY2025
Profitability
Net Margin
8.3%
7.4% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.56x
0.51x →0.56x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.12x
3.06x →3.12x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.9 pp over 4 years.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.4% | 0.51 | 3.06 | 11.6% |
| FY2023 | ₹0Cr | ₹0Cr | 8.6% | 0.58 | 3.07 | 15.3% |
| FY2024 | ₹0Cr | ₹0Cr | 8.3% | 0.57 | 3.05 | 14.5% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.56 | 3.12 | 14.5% |
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.