DuPont Decomposition
Why does MFML earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.1% = 5.5% × 0.75 × 1.97
Latest: FY2025
Profitability
Net Margin
5.5%
-0.2% →5.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.75x
0.92x →0.75x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.97x
1.76x →1.97x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.4 pp over 3 years. Driven by net margin improving (-0.2% → 5.5%), asset turnover declining (0.92x → 0.75x), leverage rising (1.76x → 1.97x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -0.2% | 0.92 | 1.76 | -0.4% |
| FY2024 | ₹0Cr | ₹0Cr | 0.9% | 0.94 | 1.88 | 1.6% |
| FY2025 | ₹0Cr | ₹0Cr | 5.5% | 0.75 | 1.97 | 8.1% |
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.