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
12.3% = 3.1% × 1.43 × 2.80
Latest: FY2025
Profitability
Net Margin
3.1%
2.2% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.43x
2.07x →1.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.80x
3.24x →2.80x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.4 pp over 4 years. Driven by asset turnover declining (2.07x → 1.43x), leverage falling (3.24x → 2.80x).
Historical Decomposition
Last 4 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% | 1.79 | 2.45 | 14.8% |
| FY2025 | ₹0Cr | ₹0Cr | 3.1% | 1.43 | 2.80 | 12.3% |
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.