DuPont Decomposition
Why does MONARCH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.6% = 67.4% × 0.17 × 1.62
Latest: FY2026
Profitability
Net Margin
67.4%
38.0% →67.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.17x
0.22x →0.17x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.62x
3.85x →1.62x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.5 pp over 5 years. Driven by net margin improving (38.0% → 67.4%), leverage falling (3.85x → 1.62x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 38.0% | 0.22 | 3.85 | 32.2% |
| FY2023 | ₹0Cr | ₹0Cr | 28.5% | 0.25 | 2.74 | 19.4% |
| FY2024 | ₹0Cr | ₹0Cr | 51.5% | 0.30 | 2.34 | 35.6% |
| FY2025 | ₹0Cr | ₹0Cr | 48.9% | 0.25 | 1.55 | 18.7% |
| FY2026 | ₹0Cr | ₹0Cr | 67.4% | 0.17 | 1.62 | 18.6% |
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.