DuPont Decomposition
Why does HAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
23.9% = 27.8% × 0.28 × 3.04
Latest: FY2025
Profitability
Net Margin
27.8%
22.7% →27.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.28x
0.19x →0.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.04x
2.85x →3.04x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.9 pp over 3 years. Driven by net margin improving (22.7% → 27.8%).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 22.7% | 0.19 | 2.85 | 12.0% |
| FY2024 | ₹0Cr | ₹0Cr | 29.2% | 0.19 | 2.68 | 14.8% |
| FY2025 | ₹0Cr | ₹0Cr | 27.8% | 0.28 | 3.04 | 23.9% |
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.