DuPont Decomposition
Why does MTEDUCARE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-94.0% = -58.8% × 0.16 × 9.88
Latest: FY2024
Profitability
Net Margin
-58.8%
-48.8% →-58.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.16x
0.16x →0.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.88x
2.83x →9.88x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 72.3 pp over 3 years. Driven by net margin declining (-48.8% → -58.8%), leverage rising (2.83x → 9.88x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -48.8% | 0.16 | 2.83 | -21.7% |
| FY2023 | ₹0Cr | ₹-0Cr | -105.0% | 0.20 | 5.18 | -106.8% |
| FY2024 | ₹0Cr | ₹-0Cr | -58.8% | 0.16 | 9.88 | -94.0% |
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.