DuPont Decomposition
Why does MAGADSUGAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.1% = 8.5% × 0.76 × 2.03
Latest: FY2025
Profitability
Net Margin
8.5%
11.7% →8.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.76x
0.21x →0.76x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.03x
2.20x →2.03x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.6 pp over 3 years. Driven by net margin declining (11.7% → 8.5%), asset turnover improving (0.21x → 0.76x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.7% | 0.21 | 2.20 | 5.5% |
| FY2024 | ₹0Cr | ₹0Cr | 16.3% | 0.18 | 2.16 | 6.3% |
| FY2025 | ₹0Cr | ₹0Cr | 8.5% | 0.76 | 2.03 | 13.1% |
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.