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
12.4% = 30.9% × 0.12 × 3.48
Latest: FY2026
Profitability
Net Margin
30.9%
38.9% →30.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.12x
0.09x →0.12x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.48x
3.25x →3.48x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~12%. Driven by net margin declining (38.9% → 30.9%), leverage rising (3.25x → 3.48x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 38.9% | 0.09 | 3.25 | 11.8% |
| FY2023 | ₹0Cr | ₹0Cr | 33.0% | 0.10 | 3.71 | 12.6% |
| FY2024 | ₹0Cr | ₹0Cr | 31.2% | 0.10 | 4.49 | 14.4% |
| FY2025 | ₹0Cr | ₹0Cr | 27.3% | 0.11 | 4.84 | 15.2% |
| FY2026 | ₹0Cr | ₹0Cr | 30.9% | 0.12 | 3.48 | 12.4% |
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.