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
11.7% = 9.0% × 0.61 × 2.13
Latest: FY2025
Profitability
Net Margin
9.0%
15.0% →9.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.61x
0.22x →0.61x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.13x
1.91x →2.13x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.5 pp over 3 years. Driven by net margin declining (15.0% → 9.0%), asset turnover improving (0.22x → 0.61x), leverage rising (1.91x → 2.13x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.0% | 0.22 | 1.91 | 6.2% |
| FY2024 | ₹0Cr | ₹0Cr | 14.4% | 0.17 | 1.50 | 3.7% |
| FY2025 | ₹0Cr | ₹0Cr | 9.0% | 0.61 | 2.13 | 11.7% |
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.