DuPont Decomposition
Why does AADHARHFC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.3% = 32.2% × 0.12 × 3.64
Latest: FY2025
Profitability
Net Margin
32.2%
27.6% →32.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.12x
0.11x →0.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.64x
4.57x →3.64x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~14%. Driven by net margin improving (27.6% → 32.2%), leverage falling (4.57x → 3.64x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 27.6% | 0.11 | 4.57 | 14.1% |
| FY2023 | ₹0Cr | ₹0Cr | 29.0% | 0.11 | 4.49 | 14.7% |
| FY2024 | ₹0Cr | ₹0Cr | 29.0% | 0.14 | 4.29 | 16.9% |
| FY2025 | ₹0Cr | ₹0Cr | 32.2% | 0.12 | 3.64 | 14.3% |
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.