DuPont Decomposition
Why does MAGNUM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.4% = 2.4% × 0.34 × 1.65
Latest: FY2025
Profitability
Net Margin
2.4%
15.4% →2.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.34x
0.44x →0.34x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.65x
1.79x →1.65x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.8 pp over 3 years. Driven by net margin declining (15.4% → 2.4%).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.4% | 0.44 | 1.79 | 12.1% |
| FY2024 | ₹0Cr | ₹0Cr | 5.4% | 0.41 | 1.67 | 3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 2.4% | 0.34 | 1.65 | 1.4% |
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.