DuPont Decomposition
Why does MUTHOOTFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.8% = 41.5% × 0.10 × 4.43
Latest: FY2025
Profitability
Net Margin
41.5%
30.8% →41.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.10x
0.04x →0.10x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.43x
3.62x →4.43x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.2 pp over 3 years. Driven by net margin improving (30.8% → 41.5%), leverage rising (3.62x → 4.43x). 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 | 30.8% | 0.04 | 3.62 | 4.6% |
| FY2024 | ₹0Cr | ₹0Cr | 28.4% | 0.04 | 3.75 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 41.5% | 0.10 | 4.43 | 17.8% |
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.