DuPont Decomposition
Why does MANOMAY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.0% = 2.9% × 1.09 × 4.17
Latest: FY2025
Profitability
Net Margin
2.9%
1.4% →2.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.09x
1.77x →1.09x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.17x
4.75x →4.17x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.6 pp over 4 years. Driven by net margin improving (1.4% → 2.9%), asset turnover declining (1.77x → 1.09x), leverage falling (4.75x → 4.17x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.4% | 1.77 | 4.75 | 11.4% |
| FY2023 | ₹0Cr | ₹0Cr | 2.9% | 0.43 | 3.39 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 2.2% | 0.32 | 4.53 | 3.1% |
| FY2025 | ₹0Cr | ₹0Cr | 2.9% | 1.09 | 4.17 | 13.0% |
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.