DuPont Decomposition
Why does HCLTECH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.1% = 12.8% × 1.12 × 1.55
Latest: FY2026
Profitability
Net Margin
12.8%
14.6% →12.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.12x
1.09x →1.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
1.43x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~22%. Driven by net margin declining (14.6% → 12.8%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.6% | 1.09 | 1.43 | 22.7% |
| FY2024 | ₹0Cr | ₹0Cr | 14.3% | 1.10 | 1.46 | 23.0% |
| FY2025 | ₹0Cr | ₹0Cr | 14.9% | 1.11 | 1.52 | 25.0% |
| FY2026 | ₹0Cr | ₹0Cr | 12.8% | 1.12 | 1.55 | 22.1% |
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.