DuPont Decomposition
Why does MARUTI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.1% = 9.8% × 1.12 × 1.37
Latest: FY2025
Profitability
Net Margin
9.8%
8.3% →9.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.12x
0.38x →1.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.37x
1.37x →1.37x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.8 pp over 3 years. Driven by net margin improving (8.3% → 9.8%), asset turnover improving (0.38x → 1.12x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.3% | 0.38 | 1.37 | 4.3% |
| FY2024 | ₹0Cr | ₹0Cr | 10.3% | 0.33 | 1.35 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 9.8% | 1.12 | 1.37 | 15.1% |
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.