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
12.4% = 8.8% × 0.66 × 2.12
Latest: FY2026
Profitability
Net Margin
8.8%
12.6% →8.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.81x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.12x
1.62x →2.12x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.2 pp over 5 years. Driven by net margin declining (12.6% → 8.8%), asset turnover declining (0.81x → 0.66x), leverage rising (1.62x → 2.12x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 12.6% | 0.81 | 1.62 | 16.6% |
| 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% |
| FY2026 | ₹0Cr | ₹0Cr | 8.8% | 0.66 | 2.12 | 12.4% |
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.