DuPont Decomposition
Why does MMP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.0% = 5.6% × 1.26 × 1.70
Latest: FY2025
Profitability
Net Margin
5.6%
6.5% →5.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.26x
1.34x →1.26x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.70x
1.41x →1.70x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~12%. Driven by leverage rising (1.41x → 1.70x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.5% | 1.34 | 1.41 | 12.2% |
| FY2023 | ₹0Cr | ₹0Cr | 4.0% | 1.50 | 1.39 | 8.3% |
| FY2024 | ₹0Cr | ₹0Cr | 5.5% | 1.33 | 1.51 | 10.9% |
| FY2025 | ₹0Cr | ₹0Cr | 5.6% | 1.26 | 1.70 | 12.0% |
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.