DuPont Decomposition
Why does M&MFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.5% = 24.9% × 0.06 × 6.68
Latest: FY2025
Profitability
Net Margin
24.9%
16.7% →24.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.06x
0.08x →0.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
6.68x
4.92x →6.68x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.8 pp over 4 years. Driven by net margin improving (16.7% → 24.9%), leverage rising (4.92x → 6.68x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.7% | 0.08 | 4.92 | 6.7% |
| FY2023 | ₹0Cr | ₹0Cr | 28.0% | 0.07 | 5.62 | 11.1% |
| FY2024 | ₹0Cr | ₹0Cr | 23.8% | 0.07 | 6.19 | 9.7% |
| FY2025 | ₹0Cr | ₹0Cr | 24.9% | 0.06 | 6.68 | 10.5% |
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.