DuPont Decomposition
Why does MGEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.5% = 1.0% × 4.08 × 2.76
Latest: FY2025
Profitability
Net Margin
1.0%
0.6% →1.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
4.08x
3.20x →4.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.76x
3.84x →2.76x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.7 pp over 3 years. Driven by asset turnover improving (3.20x → 4.08x), leverage falling (3.84x → 2.76x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 0.6% | 3.20 | 3.84 | 6.7% |
| FY2024 | ₹0Cr | ₹0Cr | 0.7% | 4.33 | 3.03 | 8.5% |
| FY2025 | ₹0Cr | ₹0Cr | 1.0% | 4.08 | 2.76 | 11.5% |
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.