DuPont Decomposition
Why does HEROMOTOCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.6% = 10.8% × 1.43 × 1.46
Latest: FY2025
Profitability
Net Margin
10.8%
9.6% →10.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.43x
0.35x →1.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.46x
1.44x →1.46x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 17.7 pp over 3 years. Driven by net margin improving (9.6% → 10.8%), asset turnover improving (0.35x → 1.43x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.6% | 0.35 | 1.44 | 4.9% |
| FY2024 | ₹0Cr | ₹0Cr | 9.8% | 0.37 | 1.48 | 5.3% |
| FY2025 | ₹0Cr | ₹0Cr | 10.8% | 1.43 | 1.46 | 22.6% |
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.