DuPont Decomposition
Why does MIDHANI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.8% = 10.5% × 0.36 × 2.06
Latest: FY2025
Profitability
Net Margin
10.5%
19.2% →10.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.36x
0.12x →0.36x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.06x
2.23x →2.06x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.7 pp over 3 years. Driven by net margin declining (19.2% → 10.5%), asset turnover improving (0.12x → 0.36x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 19.2% | 0.12 | 2.23 | 5.2% |
| FY2024 | ₹0Cr | ₹0Cr | 11.4% | 0.14 | 2.20 | 3.5% |
| FY2025 | ₹0Cr | ₹0Cr | 10.5% | 0.36 | 2.06 | 7.8% |
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.