DuPont Decomposition
Why does HITECH earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.8% = 2.5% × 1.70 × 1.40
Latest: FY2025
Profitability
Net Margin
2.5%
2.2% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.70x
2.38x →1.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
2.97x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.8 pp over 4 years. Driven by asset turnover declining (2.38x → 1.70x), leverage falling (2.97x → 1.40x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.2% | 2.38 | 2.97 | 15.6% |
| FY2023 | ₹0Cr | ₹0Cr | 1.6% | 2.54 | 2.19 | 9.0% |
| FY2024 | ₹0Cr | ₹0Cr | 1.7% | 2.23 | 2.05 | 7.6% |
| FY2025 | ₹0Cr | ₹0Cr | 2.5% | 1.70 | 1.40 | 5.8% |
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.