DuPont Decomposition
Why does MODISONLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
26.4% = 10.2% × 1.41 × 1.83
Latest: FY2026
Profitability
Net Margin
10.2%
4.3% →10.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.41x
1.58x →1.41x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.83x
1.22x →1.83x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 18.1 pp over 5 years. Driven by net margin improving (4.3% → 10.2%), asset turnover declining (1.58x → 1.41x), leverage rising (1.22x → 1.83x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.3% | 1.58 | 1.22 | 8.3% |
| FY2023 | ₹0Cr | ₹0Cr | 3.4% | 1.51 | 1.18 | 6.0% |
| FY2024 | ₹0Cr | ₹0Cr | 5.3% | 1.49 | 1.33 | 10.5% |
| FY2025 | ₹0Cr | ₹0Cr | 5.0% | 1.54 | 1.47 | 11.4% |
| FY2026 | ₹0Cr | ₹0Cr | 10.2% | 1.41 | 1.83 | 26.4% |
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.