DuPont Decomposition
Why does HGINFRA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.1% = 10.5% × 0.55 × 2.97
Latest: FY2025
Profitability
Net Margin
10.5%
10.4% →10.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
1.11x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.97x
2.29x →2.97x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.3 pp over 4 years. Driven by asset turnover declining (1.11x → 0.55x), leverage rising (2.29x → 2.97x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.4% | 1.11 | 2.29 | 26.5% |
| FY2023 | ₹0Cr | ₹0Cr | 11.0% | 0.91 | 2.56 | 25.7% |
| FY2024 | ₹0Cr | ₹0Cr | 10.5% | 0.94 | 2.21 | 21.9% |
| FY2025 | ₹0Cr | ₹0Cr | 10.5% | 0.55 | 2.97 | 17.1% |
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.