DuPont Decomposition
Why does HINDWAREAP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-8.7% = -2.8% × 0.98 × 3.22
Latest: FY2025
Profitability
Net Margin
-2.8%
2.0% →-2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.98x
1.22x →0.98x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.22x
4.00x →3.22x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 18.6 pp over 3 years. Driven by net margin declining (2.0% → -2.8%), asset turnover declining (1.22x → 0.98x), leverage falling (4.00x → 3.22x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.0% | 1.22 | 4.00 | 9.9% |
| FY2024 | ₹0Cr | ₹0Cr | 0.9% | 1.12 | 4.05 | 4.3% |
| FY2025 | ₹0Cr | ₹-0Cr | -2.8% | 0.98 | 3.22 | -8.7% |
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.