DuPont Decomposition
Why does EIHAHOTELS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.1% = 22.5% × 0.63 × 1.21
Latest: FY2025
Profitability
Net Margin
22.5%
24.3% →22.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.63x
0.21x →0.63x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.21x
1.27x →1.21x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.5 pp over 3 years. Driven by net margin declining (24.3% → 22.5%), asset turnover improving (0.21x → 0.63x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 24.3% | 0.21 | 1.27 | 6.6% |
| FY2024 | ₹0Cr | ₹0Cr | 27.8% | 0.24 | 1.22 | 8.0% |
| FY2025 | ₹0Cr | ₹0Cr | 22.5% | 0.63 | 1.21 | 17.1% |
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.