DuPont Decomposition
Why does HAPPYFORGE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 19.5% × 0.59 × 1.24
Latest: FY2026
Profitability
Net Margin
19.5%
17.9% →19.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.59x
0.70x →0.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.24x
1.43x →1.24x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.9 pp over 5 years. Driven by net margin improving (17.9% → 19.5%), asset turnover declining (0.70x → 0.59x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 17.9% | 0.70 | 1.43 | 18.1% |
| FY2023 | ₹0Cr | ₹0Cr | 19.4% | 0.81 | 1.34 | 21.1% |
| FY2024 | ₹0Cr | ₹0Cr | 19.6% | 0.66 | 1.17 | 15.1% |
| FY2025 | ₹0Cr | ₹0Cr | 19.0% | 0.64 | 1.20 | 14.5% |
| FY2026 | ₹0Cr | ₹0Cr | 19.5% | 0.59 | 1.24 | 14.2% |
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.