DuPont Decomposition
Why does MCLEODRUSS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-349.3% = -16.9% × 0.33 × 63.46
Latest: FY2025
Profitability
Net Margin
-16.9%
-13.6% →-16.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.33x
0.28x →0.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
63.46x
2.89x →63.46x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 338.4 pp over 4 years. Driven by net margin declining (-13.6% → -16.9%), leverage rising (2.89x → 63.46x). 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 | -13.6% | 0.28 | 2.89 | -11.0% |
| FY2023 | ₹0Cr | ₹-0Cr | -79.5% | 0.36 | 6.57 | -185.6% |
| FY2024 | ₹0Cr | ₹-0Cr | -27.9% | 0.32 | 14.14 | -124.6% |
| FY2025 | ₹0Cr | ₹-0Cr | -16.9% | 0.33 | 63.46 | -349.3% |
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.