DuPont Decomposition
Why does MBAPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 8.3% × 0.73 × 2.34
Latest: FY2025
Profitability
Net Margin
8.3%
12.7% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
1.32x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.34x
2.26x →2.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 23.6 pp over 3 years. Driven by net margin declining (12.7% → 8.3%), asset turnover declining (1.32x → 0.73x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.7% | 1.32 | 2.26 | 37.8% |
| FY2024 | ₹0Cr | ₹0Cr | 3.0% | 1.02 | 2.29 | 7.1% |
| FY2025 | ₹0Cr | ₹0Cr | 8.3% | 0.73 | 2.34 | 14.2% |
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.