DuPont Decomposition
Why does MAHLOG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-7.9% = -0.6% × 2.37 × 5.68
Latest: FY2025
Profitability
Net Margin
-0.6%
-0.1% →-0.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.37x
0.50x →2.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.68x
4.55x →5.68x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.7 pp over 3 years. Driven by asset turnover improving (0.50x → 2.37x), leverage rising (4.55x → 5.68x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -0.1% | 0.50 | 4.55 | -0.2% |
| FY2024 | ₹0Cr | ₹-0Cr | -0.8% | 0.59 | 5.03 | -2.4% |
| FY2025 | ₹0Cr | ₹-0Cr | -0.6% | 2.37 | 5.68 | -7.9% |
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.