DuPont Decomposition
Why does MOTHERSON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.2% = 3.4% × 1.21 × 2.50
Latest: FY2025
Profitability
Net Margin
3.4%
3.1% →3.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.21x
0.36x →1.21x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.50x
2.75x →2.50x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.1 pp over 3 years. Driven by asset turnover improving (0.36x → 1.21x), leverage falling (2.75x → 2.50x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.1% | 0.36 | 2.75 | 3.1% |
| FY2024 | ₹0Cr | ₹0Cr | 16.7% | 0.06 | 1.20 | 1.2% |
| FY2025 | ₹0Cr | ₹0Cr | 3.4% | 1.21 | 2.50 | 10.2% |
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.