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
4.0% = 1.1% × 1.53 × 2.52
Latest: FY2025
Profitability
Net Margin
1.1%
3.5% →1.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.53x
1.03x →1.53x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.52x
2.40x →2.52x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.6 pp over 3 years. Driven by net margin declining (3.5% → 1.1%), asset turnover improving (1.03x → 1.53x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 1.03 | 2.40 | 8.6% |
| FY2024 | ₹0Cr | ₹0Cr | 1.4% | 0.40 | 1.69 | 0.9% |
| FY2025 | ₹0Cr | ₹0Cr | 1.1% | 1.53 | 2.52 | 4.0% |
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.