DuPont Decomposition
Why does MODINATUR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.5% = 4.9% × 1.93 × 2.71
Latest: FY2025
Profitability
Net Margin
4.9%
2.0% →4.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.93x
2.87x →1.93x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.71x
2.14x →2.71x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.4 pp over 4 years. Driven by net margin improving (2.0% → 4.9%), asset turnover declining (2.87x → 1.93x), leverage rising (2.14x → 2.71x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.0% | 2.87 | 2.14 | 12.1% |
| FY2023 | ₹0Cr | ₹0Cr | 0.3% | 1.59 | 3.21 | 1.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -0.3% | 1.29 | 3.38 | -1.5% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 1.93 | 2.71 | 25.5% |
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.