DuPont Decomposition
Why does HMVL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.1% = 11.3% × 0.30 × 1.49
Latest: FY2025
Profitability
Net Margin
11.3%
6.6% →11.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.30x
0.28x →0.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.49x
1.37x →1.49x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.5 pp over 4 years. Driven by net margin improving (6.6% → 11.3%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.6% | 0.28 | 1.37 | 2.5% |
| FY2023 | ₹0Cr | ₹-0Cr | -5.7% | 0.31 | 1.48 | -2.6% |
| FY2024 | ₹0Cr | ₹0Cr | 1.5% | 0.30 | 1.52 | 0.7% |
| FY2025 | ₹0Cr | ₹0Cr | 11.3% | 0.30 | 1.49 | 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.