DuPont Decomposition
Why does HINDCOMPOS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.2% = 10.8% × 0.27 × 1.10
Latest: FY2025
Profitability
Net Margin
10.8%
12.2% →10.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.27x
0.08x →0.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.09x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.2 pp over 3 years. Driven by net margin declining (12.2% → 10.8%), asset turnover improving (0.08x → 0.27x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.2% | 0.08 | 1.09 | 1.0% |
| FY2024 | ₹0Cr | ₹0Cr | 10.1% | 0.07 | 1.10 | 0.8% |
| FY2025 | ₹0Cr | ₹0Cr | 10.8% | 0.27 | 1.10 | 3.2% |
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.