DuPont Decomposition
Why does MANAPPURAM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.3% = 17.7% × 0.08 × 4.65
Latest: FY2026
Profitability
Net Margin
17.7%
32.9% →17.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.08x
0.12x →0.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.65x
4.04x →4.65x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.6 pp over 5 years. Driven by net margin declining (32.9% → 17.7%), leverage rising (4.04x → 4.65x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 32.9% | 0.12 | 4.04 | 15.9% |
| FY2023 | ₹0Cr | ₹0Cr | 33.5% | 0.11 | 4.10 | 15.5% |
| FY2024 | ₹0Cr | ₹0Cr | 36.9% | 0.13 | 4.05 | 18.9% |
| FY2025 | ₹0Cr | ₹0Cr | 19.0% | 0.13 | 3.96 | 9.8% |
| FY2026 | ₹0Cr | ₹0Cr | 17.7% | 0.08 | 4.65 | 6.3% |
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.