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
18.7% = 57.0% × 0.21 × 1.55
Latest: FY2025
Profitability
Net Margin
57.0%
11.3% →57.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.21x
0.06x →0.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
2.71x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.7 pp over 3 years. Driven by net margin improving (11.3% → 57.0%), asset turnover improving (0.06x → 0.21x), leverage falling (2.71x → 1.55x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.3% | 0.06 | 2.71 | 2.0% |
| FY2024 | ₹0Cr | ₹0Cr | 44.8% | 0.08 | 2.34 | 8.8% |
| FY2025 | ₹0Cr | ₹0Cr | 57.0% | 0.21 | 1.55 | 18.7% |
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.