DuPont Decomposition

Why does HDFCBANK earn its ROE?

Breaking down Return on Equity into profitability, efficiency, and leverage.

ROE = Net Margin × Asset Turnover × Equity Multiplier

7.8% = 28.4% × 0.05 × 5.59

Latest: FY2025

Profitability

Net Margin

28.4%

28.4% →28.4%

How much profit per ₹ of revenue

Efficiency

Asset Turnover

0.05x

0.05x →0.05x

Revenue per ₹ of assets

Leverage

Equity Multiplier

5.59x

5.59x →5.59x

Assets funded by equity vs debt

Historical Decomposition

Last 1 years

YearRevenuePATNet MarginAsset TOLeverageROE
FY2025₹0Cr₹0Cr28.4%0.055.597.8%

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)

See DCF fair value for HDFCBANK

Combine financial quality with intrinsic value.

See Fair Value →

DuPont decomposition from audited annual financials. Factual analysis, not investment advice.