DuPont Decomposition
Why does MEGASTAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.0% = 1.8% × 1.99 × 2.61
Latest: FY2026
Profitability
Net Margin
1.8%
3.0% →1.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.99x
2.47x →1.99x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.61x
2.09x →2.61x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.2 pp over 5 years. Driven by net margin declining (3.0% → 1.8%), asset turnover declining (2.47x → 1.99x), leverage rising (2.09x → 2.61x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.0% | 2.47 | 2.09 | 15.2% |
| FY2023 | ₹0Cr | ₹0Cr | 3.3% | 2.75 | 2.40 | 21.9% |
| FY2024 | ₹0Cr | ₹0Cr | 2.3% | 1.77 | 1.69 | 6.9% |
| FY2025 | ₹0Cr | ₹0Cr | 1.1% | 1.53 | 2.52 | 4.0% |
| FY2026 | ₹0Cr | ₹0Cr | 1.8% | 1.99 | 2.61 | 9.0% |
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.