DuPont Decomposition
Why does HILTON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.3% = 3.8% × 0.74 × 1.91
Latest: FY2025
Profitability
Net Margin
3.8%
5.6% →3.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.74x
0.62x →0.74x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.91x
1.90x →1.91x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.2 pp over 3 years. Driven by net margin declining (5.6% → 3.8%), asset turnover improving (0.62x → 0.74x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.6% | 0.62 | 1.90 | 6.6% |
| FY2024 | ₹0Cr | ₹0Cr | 4.8% | 0.75 | 1.85 | 6.7% |
| FY2025 | ₹0Cr | ₹0Cr | 3.8% | 0.74 | 1.91 | 5.3% |
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.