DuPont Decomposition
Why does HONASA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.2% = 3.5% × 1.15 × 1.52
Latest: FY2025
Profitability
Net Margin
3.5%
1.7% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.15x
0.91x →1.15x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.52x
1.47x →1.52x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.9 pp over 4 years. Driven by net margin improving (1.7% → 3.5%), asset turnover improving (0.91x → 1.15x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.7% | 0.91 | 1.47 | 2.2% |
| FY2023 | ₹0Cr | ₹-0Cr | -9.6% | 1.53 | 1.61 | -23.6% |
| FY2024 | ₹0Cr | ₹0Cr | 5.8% | 1.18 | 1.49 | 10.1% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 1.15 | 1.52 | 6.2% |
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.