DuPont Decomposition
Why does MIRCELECTR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-1.8% = -0.3% × 1.41 × 4.20
Latest: FY2025
Profitability
Net Margin
-0.3%
-3.3% →-0.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.41x
0.43x →1.41x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.20x
2.77x →4.20x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.0 pp over 3 years. Driven by net margin improving (-3.2% → -0.3%), asset turnover improving (0.43x → 1.41x), leverage rising (2.77x → 4.20x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -3.3% | 0.43 | 2.77 | -3.8% |
| FY2024 | ₹0Cr | ₹-0Cr | -17.2% | 0.52 | 4.44 | -39.8% |
| FY2025 | ₹0Cr | ₹-0Cr | -0.3% | 1.41 | 4.20 | -1.8% |
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.