DuPont Decomposition
Why does HDFCAMC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
30.3% = 70.3% × 0.40 × 1.08
Latest: FY2025
Profitability
Net Margin
70.3%
69.5% →70.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.40x
0.08x →0.40x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.08x
1.07x →1.08x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 24.1 pp over 3 years. Driven by asset turnover improving (0.08x → 0.40x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 69.5% | 0.08 | 1.07 | 6.2% |
| FY2024 | ₹0Cr | ₹0Cr | 77.8% | 0.09 | 1.07 | 7.6% |
| FY2025 | ₹0Cr | ₹0Cr | 70.3% | 0.40 | 1.08 | 30.3% |
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.