DuPont Decomposition
Why does HAPPSTMNDS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.6% = 9.2% × 0.64 × 2.15
Latest: FY2026
Profitability
Net Margin
9.2%
16.6% →9.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.97x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.15x
1.69x →2.15x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.6 pp over 5 years. Driven by net margin declining (16.6% → 9.2%), asset turnover declining (0.97x → 0.64x), leverage rising (1.69x → 2.15x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.6% | 0.97 | 1.69 | 27.2% |
| FY2023 | ₹0Cr | ₹0Cr | 16.2% | 0.87 | 1.96 | 27.5% |
| FY2024 | ₹0Cr | ₹0Cr | 15.3% | 0.72 | 1.52 | 16.8% |
| FY2025 | ₹0Cr | ₹0Cr | 9.0% | 0.61 | 2.13 | 11.7% |
| FY2026 | ₹0Cr | ₹0Cr | 9.2% | 0.64 | 2.15 | 12.6% |
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.