DuPont Decomposition
Why does HINDMOTORS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
48.8% = 692.5% × 0.03 × 2.01
Latest: FY2025
Profitability
Net Margin
692.5%
782.9% →692.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.03x
0.06x →0.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.01x
3.23x →2.01x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 106.8 pp over 2 years. Driven by net margin declining (782.9% → 692.5%), leverage falling (3.23x → 2.01x).
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 782.9% | 0.06 | 3.23 | 155.6% |
| FY2025 | ₹0Cr | ₹0Cr | 692.5% | 0.03 | 2.01 | 48.8% |
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.