DuPont Decomposition
Why does MKPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.1% = 3.1% × 2.05 × 1.88
Latest: FY2025
Profitability
Net Margin
3.1%
4.0% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.05x
3.01x →2.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.88x
2.19x →1.88x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.1 pp over 4 years. Driven by asset turnover declining (3.01x → 2.05x), leverage falling (2.19x → 1.88x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.0% | 3.01 | 2.19 | 26.2% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 3.05 | 2.07 | 21.9% |
| FY2024 | ₹0Cr | ₹0Cr | 4.6% | 2.55 | 1.58 | 18.4% |
| FY2025 | ₹0Cr | ₹0Cr | 3.1% | 2.05 | 1.88 | 12.1% |
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.