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
7.1% = 6.4% × 0.83 × 1.35
Latest: FY2025
Profitability
Net Margin
6.4%
7.0% →6.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
1.13x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.35x
2.22x →1.35x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.5 pp over 4 years. Driven by asset turnover declining (1.13x → 0.83x), leverage falling (2.22x → 1.35x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.0% | 1.13 | 2.22 | 17.6% |
| FY2023 | ₹0Cr | ₹0Cr | 9.5% | 0.24 | 1.35 | 3.0% |
| FY2024 | ₹0Cr | ₹0Cr | 9.7% | 0.24 | 1.33 | 3.1% |
| FY2025 | ₹0Cr | ₹0Cr | 6.4% | 0.83 | 1.35 | 7.1% |
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.