DuPont Decomposition
Why does HINDUNILVR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
21.5% = 17.1% × 0.78 × 1.61
Latest: FY2025
Profitability
Net Margin
17.1%
17.1% →17.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.78x
0.21x →0.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.61x
1.45x →1.61x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.3 pp over 3 years. Driven by asset turnover improving (0.21x → 0.78x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 17.1% | 0.21 | 1.45 | 5.2% |
| FY2024 | ₹0Cr | ₹0Cr | 16.8% | 0.19 | 1.53 | 5.0% |
| FY2025 | ₹0Cr | ₹0Cr | 17.1% | 0.78 | 1.61 | 21.5% |
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.