DuPont Decomposition
Why does MOTILALOFS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.5% = 38.8% × 0.19 × 3.05
Latest: FY2025
Profitability
Net Margin
38.8%
16.1% →38.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.19x
0.04x →0.19x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.05x
3.66x →3.05x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 19.8 pp over 3 years. Driven by net margin improving (16.1% → 38.8%), asset turnover improving (0.04x → 0.19x), leverage falling (3.66x → 3.05x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.1% | 0.04 | 3.66 | 2.6% |
| FY2024 | ₹0Cr | ₹0Cr | 33.8% | 0.07 | 3.63 | 8.3% |
| FY2025 | ₹0Cr | ₹0Cr | 38.8% | 0.19 | 3.05 | 22.5% |
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.