DuPont Decomposition
Why does MSPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-2.9% = -1.0% × 1.88 × 1.57
Latest: FY2025
Profitability
Net Margin
-1.0%
1.1% →-1.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.88x
1.32x →1.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.57x
2.83x →1.57x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.1 pp over 4 years. Driven by net margin declining (1.1% → -1.0%), asset turnover improving (1.32x → 1.88x), leverage falling (2.83x → 1.57x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.1% | 1.32 | 2.83 | 4.2% |
| FY2023 | ₹0Cr | ₹-0Cr | -2.0% | 1.54 | 2.89 | -8.9% |
| FY2024 | ₹0Cr | ₹0Cr | 0.5% | 1.74 | 2.81 | 2.5% |
| FY2025 | ₹0Cr | ₹-0Cr | -1.0% | 1.88 | 1.57 | -2.9% |
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.