DuPont Decomposition
Why does HDFCLIFE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.8% = 1.9% × 0.25 × 22.00
Latest: FY2026
Profitability
Net Margin
1.9%
2.0% →1.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.25x
0.29x →0.25x
Revenue per ₹ of assets
Leverage
Equity Multiplier
22.00x
14.78x →22.00x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.3 pp over 5 years. Driven by leverage rising (14.78x → 22.00x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.0% | 0.29 | 14.78 | 8.5% |
| FY2023 | ₹0Cr | ₹0Cr | 1.9% | 0.28 | 19.09 | 10.5% |
| FY2024 | ₹0Cr | ₹0Cr | 1.6% | 0.32 | 20.64 | 10.7% |
| FY2025 | ₹0Cr | ₹0Cr | 1.9% | 0.28 | 21.63 | 11.2% |
| FY2026 | ₹0Cr | ₹0Cr | 1.9% | 0.25 | 22.00 | 10.8% |
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)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.