DuPont Decomposition
Why does HNDFDS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.8% = 3.5% × 1.34 × 2.72
Latest: FY2026
Profitability
Net Margin
3.5%
2.2% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.34x
2.07x →1.34x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.72x
3.24x →2.72x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.9 pp over 5 years. Driven by net margin improving (2.2% → 3.5%), asset turnover declining (2.07x → 1.34x), leverage falling (3.24x → 2.72x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.2% | 2.07 | 3.24 | 14.7% |
| FY2023 | ₹0Cr | ₹0Cr | 2.7% | 1.94 | 3.56 | 19.0% |
| FY2024 | ₹0Cr | ₹0Cr | 3.4% | 1.43 | 2.98 | 14.4% |
| FY2025 | ₹0Cr | ₹0Cr | 3.2% | 1.46 | 2.80 | 12.9% |
| FY2026 | ₹0Cr | ₹0Cr | 3.5% | 1.34 | 2.72 | 12.8% |
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.