DuPont Decomposition
Why does MEDICO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.2% = 6.8% × 1.24 × 1.92
Latest: FY2025
Profitability
Net Margin
6.8%
4.1% →6.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.24x
1.53x →1.24x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.92x
2.12x →1.92x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.0 pp over 4 years. Driven by net margin improving (4.1% → 6.8%), asset turnover declining (1.53x → 1.24x), leverage falling (2.12x → 1.92x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.1% | 1.53 | 2.12 | 13.2% |
| FY2023 | ₹0Cr | ₹0Cr | 5.2% | 1.58 | 1.99 | 16.5% |
| FY2024 | ₹0Cr | ₹0Cr | 5.8% | 1.49 | 1.84 | 15.8% |
| FY2025 | ₹0Cr | ₹0Cr | 6.8% | 1.24 | 1.92 | 16.2% |
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.