DuPont Decomposition
Why does HINDALCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.8% = 4.9% × 0.79 × 2.55
Latest: FY2026
Profitability
Net Margin
4.9%
7.1% →4.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.79x
0.87x →0.79x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.55x
2.85x →2.55x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.8 pp over 5 years. Driven by net margin declining (7.1% → 4.9%), leverage falling (2.85x → 2.55x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.1% | 0.87 | 2.85 | 17.6% |
| FY2023 | ₹0Cr | ₹0Cr | 4.5% | 0.99 | 2.37 | 10.7% |
| FY2024 | ₹0Cr | ₹0Cr | 4.7% | 0.93 | 2.18 | 9.6% |
| FY2025 | ₹0Cr | ₹0Cr | 6.7% | 0.90 | 2.15 | 12.9% |
| FY2026 | ₹0Cr | ₹0Cr | 4.9% | 0.79 | 2.55 | 9.8% |
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.