DuPont Decomposition
Why does MUFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.2% = 10.8% × 0.17 × 3.84
Latest: FY2025
Profitability
Net Margin
10.8%
71.3% →10.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.17x
0.15x →0.17x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.84x
1.01x →3.84x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.6 pp over 4 years. Driven by net margin declining (71.3% → 10.8%), leverage rising (1.01x → 3.84x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 71.3% | 0.15 | 1.01 | 10.7% |
| FY2023 | ₹0Cr | ₹0Cr | 24.5% | 0.08 | 2.57 | 5.3% |
| FY2024 | ₹0Cr | ₹0Cr | 12.6% | 0.03 | 3.79 | 1.7% |
| FY2025 | ₹0Cr | ₹0Cr | 10.8% | 0.17 | 3.84 | 7.2% |
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.