DuPont Decomposition
Why does HERITGFOOD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.4% = 4.6% × 2.65 × 1.60
Latest: FY2025
Profitability
Net Margin
4.6%
1.5% →4.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.65x
2.88x →2.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.60x
1.55x →1.60x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.6 pp over 3 years. Driven by net margin improving (1.5% → 4.6%), asset turnover declining (2.88x → 2.65x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.5% | 2.88 | 1.55 | 6.8% |
| FY2024 | ₹0Cr | ₹0Cr | 2.8% | 2.96 | 1.59 | 13.2% |
| FY2025 | ₹0Cr | ₹0Cr | 4.6% | 2.65 | 1.60 | 19.4% |
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.