DuPont Decomposition
Why does MONTECARLO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.7% = 7.4% × 0.64 × 2.06
Latest: FY2025
Profitability
Net Margin
7.4%
11.9% →7.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.75x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.06x
1.93x →2.06x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.3 pp over 3 years. Driven by net margin declining (11.9% → 7.4%), asset turnover declining (0.75x → 0.64x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.9% | 0.75 | 1.93 | 17.1% |
| FY2024 | ₹0Cr | ₹0Cr | 5.7% | 0.70 | 1.91 | 7.5% |
| FY2025 | ₹0Cr | ₹0Cr | 7.4% | 0.64 | 2.06 | 9.7% |
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.