DuPont Decomposition
Why does MUTHOOTCAP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.0% = 9.9% × 0.13 × 5.45
Latest: FY2025
Profitability
Net Margin
9.9%
22.5% →9.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.13x
0.05x →0.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.45x
4.98x →5.45x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.6 pp over 3 years. Driven by net margin declining (22.5% → 9.9%), leverage rising (4.98x → 5.45x). 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 |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 22.5% | 0.05 | 4.98 | 5.3% |
| FY2024 | ₹0Cr | ₹0Cr | 11.9% | 0.04 | 3.78 | 1.9% |
| FY2025 | ₹0Cr | ₹0Cr | 9.9% | 0.13 | 5.45 | 7.0% |
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.