DuPont Decomposition
Why does HINDCON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.0% = 6.7% × 0.88 × 1.17
Latest: FY2025
Profitability
Net Margin
6.7%
6.3% →6.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.88x
1.27x →0.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.17x
1.33x →1.17x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.7 pp over 4 years. Driven by asset turnover declining (1.27x → 0.88x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.3% | 1.27 | 1.33 | 10.7% |
| FY2023 | ₹0Cr | ₹0Cr | 5.0% | 1.60 | 1.25 | 10.1% |
| FY2024 | ₹0Cr | ₹0Cr | 9.6% | 1.08 | 1.18 | 12.2% |
| FY2025 | ₹0Cr | ₹0Cr | 6.7% | 0.88 | 1.17 | 7.0% |
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.