DuPont Decomposition
Why does MODTHREAD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.5% = 1.3% × 1.13 × 1.70
Latest: FY2025
Profitability
Net Margin
1.3%
71.1% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.13x
1.70x →1.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.70x
1.71x →1.70x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 204.6 pp over 3 years. Driven by net margin declining (71.1% → 1.3%), asset turnover declining (1.70x → 1.13x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 71.1% | 1.70 | 1.71 | 207.2% |
| FY2024 | ₹0Cr | ₹0Cr | 8.5% | 1.49 | 1.56 | 19.7% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 1.13 | 1.70 | 2.5% |
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.