DuPont Decomposition
Why does MADHAV earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-1.3% = -4.8% × 0.22 × 1.18
Latest: FY2025
Profitability
Net Margin
-4.8%
-9.6% →-4.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.22x
0.37x →0.22x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.18x
1.15x →1.18x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.8 pp over 4 years. Driven by net margin improving (-9.6% → -4.8%), asset turnover declining (0.37x → 0.22x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -9.6% | 0.37 | 1.15 | -4.1% |
| FY2023 | ₹0Cr | ₹-0Cr | -8.1% | 0.33 | 1.16 | -3.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -5.8% | 0.28 | 1.19 | -1.9% |
| FY2025 | ₹0Cr | ₹-0Cr | -4.8% | 0.22 | 1.18 | -1.3% |
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.