DuPont Decomposition
Why does HERANBA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.4% = 0.2% × 0.77 × 2.16
Latest: FY2025
Profitability
Net Margin
0.2%
13.2% →0.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.77x
1.34x →0.77x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.16x
1.50x →2.16x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 26.1 pp over 4 years. Driven by net margin declining (13.2% → 0.2%), asset turnover declining (1.34x → 0.77x), leverage rising (1.50x → 2.16x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.2% | 1.34 | 1.50 | 26.5% |
| FY2023 | ₹0Cr | ₹0Cr | 8.0% | 1.13 | 1.43 | 12.9% |
| FY2024 | ₹0Cr | ₹0Cr | 2.8% | 0.84 | 1.76 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 0.2% | 0.77 | 2.16 | 0.4% |
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.