DuPont Decomposition
Why does MVGJL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.0% = 4.2% × 1.59 × 2.08
Latest: FY2025
Profitability
Net Margin
4.2%
2.6% →4.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.59x
1.88x →1.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.08x
3.30x →2.08x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.0 pp over 4 years. Driven by net margin improving (2.6% → 4.2%), asset turnover declining (1.88x → 1.59x), leverage falling (3.30x → 2.08x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.6% | 1.88 | 3.30 | 16.0% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 1.88 | 3.13 | 20.8% |
| FY2024 | ₹0Cr | ₹0Cr | 3.8% | 1.54 | 2.27 | 13.1% |
| FY2025 | ₹0Cr | ₹0Cr | 4.2% | 1.59 | 2.08 | 14.0% |
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.