DuPont Decomposition
Why does MEESHO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-272.7% = -42.0% × 1.30 × 5.00
Latest: FY2025
Profitability
Net Margin
-42.0%
-29.2% →-42.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.30x
1.49x →1.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.00x
1.56x →5.00x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 205.0 pp over 3 years. Driven by net margin declining (-29.2% → -42.0%), asset turnover declining (1.49x → 1.30x), leverage rising (1.56x → 5.00x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -29.2% | 1.49 | 1.56 | -67.6% |
| FY2024 | ₹0Cr | ₹-0Cr | -4.3% | 1.83 | 1.87 | -14.7% |
| FY2025 | ₹0Cr | ₹-0Cr | -42.0% | 1.30 | 5.00 | -272.7% |
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.