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
25.0% = 14.9% × 1.11 × 1.51
Latest: FY2025
Profitability
Net Margin
14.9%
15.0% →14.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.11x
0.28x →1.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.51x
1.43x →1.51x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 18.9 pp over 3 years. Driven by asset turnover improving (0.28x → 1.11x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.0% | 0.28 | 1.43 | 6.1% |
| FY2024 | ₹0Cr | ₹0Cr | 22.9% | 0.23 | 1.33 | 7.0% |
| FY2025 | ₹0Cr | ₹0Cr | 14.9% | 1.11 | 1.51 | 25.0% |
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.