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
12.9% = 6.8% × 0.89 × 2.15
Latest: FY2025
Profitability
Net Margin
6.8%
4.2% →6.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.89x
0.21x →0.89x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.15x
1.66x →2.15x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.5 pp over 3 years. Driven by net margin improving (4.2% → 6.8%), asset turnover improving (0.21x → 0.89x), leverage rising (1.66x → 2.15x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.2% | 0.21 | 1.66 | 1.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.7% | 0.24 | 2.18 | 3.0% |
| FY2025 | ₹0Cr | ₹0Cr | 6.8% | 0.89 | 2.15 | 12.9% |
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.