DuPont Decomposition
Why does MEDICAMEQ earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.4% = 4.4% × 0.55 × 1.40
Latest: FY2025
Profitability
Net Margin
4.4%
12.9% →4.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.51x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
1.54x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.8 pp over 4 years. Driven by net margin declining (12.9% → 4.4%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.9% | 0.51 | 1.54 | 10.2% |
| FY2023 | ₹0Cr | ₹0Cr | 10.5% | 0.51 | 1.44 | 7.7% |
| FY2024 | ₹0Cr | ₹0Cr | 6.1% | 0.61 | 1.44 | 5.3% |
| FY2025 | ₹0Cr | ₹0Cr | 4.4% | 0.55 | 1.40 | 3.4% |
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.