DuPont Decomposition
Why does MGL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.6% = 14.4% × 0.87 × 1.40
Latest: FY2025
Profitability
Net Margin
14.4%
11.4% →14.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
1.15x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
1.46x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.5 pp over 3 years. Driven by net margin improving (11.4% → 14.4%), asset turnover declining (1.15x → 0.87x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.4% | 1.15 | 1.46 | 19.1% |
| FY2024 | ₹0Cr | ₹0Cr | 18.5% | 0.94 | 1.44 | 24.9% |
| FY2025 | ₹0Cr | ₹0Cr | 14.4% | 0.87 | 1.40 | 17.6% |
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.