DuPont Decomposition
Why does HISARMETAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.1% = 1.3% × 1.47 × 2.64
Latest: FY2025
Profitability
Net Margin
1.3%
4.0% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.47x
1.90x →1.47x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.64x
2.67x →2.64x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.1 pp over 3 years. Driven by net margin declining (4.0% → 1.3%), asset turnover declining (1.90x → 1.47x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.0% | 1.90 | 2.67 | 20.2% |
| FY2024 | ₹0Cr | ₹0Cr | 2.7% | 1.42 | 2.82 | 10.8% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 1.47 | 2.64 | 5.1% |
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.