DuPont Decomposition
Why does MPSLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
31.1% = 20.5% × 1.05 × 1.45
Latest: FY2025
Profitability
Net Margin
20.5%
21.8% →20.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
0.91x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.45x
1.30x →1.45x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.4 pp over 3 years. Driven by net margin declining (21.8% → 20.5%), asset turnover improving (0.91x → 1.05x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 21.8% | 0.91 | 1.30 | 25.8% |
| FY2024 | ₹0Cr | ₹0Cr | 21.8% | 0.74 | 1.60 | 25.8% |
| FY2025 | ₹0Cr | ₹0Cr | 20.5% | 1.05 | 1.45 | 31.1% |
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.