DuPont Decomposition
Why does MBEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.1% = 7.8% × 1.16 × 2.77
Latest: FY2025
Profitability
Net Margin
7.8%
2.4% →7.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.16x
1.26x →1.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.77x
3.76x →2.77x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.9 pp over 4 years. Driven by net margin improving (2.4% → 7.8%), asset turnover declining (1.26x → 1.16x), leverage falling (3.76x → 2.77x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.4% | 1.26 | 3.76 | 11.2% |
| FY2023 | ₹0Cr | ₹0Cr | 3.7% | 1.58 | 3.11 | 18.3% |
| FY2024 | ₹0Cr | ₹0Cr | 5.7% | 1.26 | 2.72 | 19.6% |
| FY2025 | ₹0Cr | ₹0Cr | 7.8% | 1.16 | 2.77 | 25.1% |
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.