DuPont Decomposition
Why does HITECHGEAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.3% = 4.5% × 1.13 × 1.66
Latest: FY2025
Profitability
Net Margin
4.5%
1.5% →4.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.13x
1.16x →1.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.66x
2.78x →1.66x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.6 pp over 3 years. Driven by net margin improving (1.5% → 4.5%), leverage falling (2.78x → 1.66x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 1.5% | 1.16 | 2.78 | 4.7% |
| FY2024 | ₹0Cr | ₹0Cr | 10.5% | 1.19 | 1.95 | 24.5% |
| FY2025 | ₹0Cr | ₹0Cr | 4.5% | 1.13 | 1.66 | 8.3% |
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.