DuPont Decomposition
Why does HARSHA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.1% = 9.5% × 0.79 × 1.47
Latest: FY2026
Profitability
Net Margin
9.5%
7.0% →9.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
1.13x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.47x
2.22x →1.47x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.6 pp over 5 years. Driven by net margin improving (7.0% → 9.5%), asset turnover declining (1.13x → 0.79x), leverage falling (2.22x → 1.47x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.0% | 1.13 | 2.22 | 17.6% |
| FY2023 | ₹0Cr | ₹0Cr | 9.0% | 0.94 | 1.35 | 11.5% |
| FY2024 | ₹0Cr | ₹0Cr | 8.1% | 0.88 | 1.33 | 9.5% |
| FY2025 | ₹0Cr | ₹0Cr | 6.3% | 0.83 | 1.35 | 7.1% |
| FY2026 | ₹0Cr | ₹0Cr | 9.5% | 0.79 | 1.47 | 11.1% |
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.