DuPont Decomposition
Why does HOMEFIRST earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.2% = 28.8% × 0.11 × 4.84
Latest: FY2025
Profitability
Net Margin
28.8%
28.2% →28.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.11x
0.03x →0.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.84x
3.71x →4.84x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.6 pp over 3 years. Driven by leverage rising (3.71x → 4.84x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 28.2% | 0.03 | 3.71 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 26.7% | 0.03 | 4.49 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 28.8% | 0.11 | 4.84 | 15.2% |
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.