DuPont Decomposition
Why does HONAUT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.0% = 12.5% × 0.75 × 1.39
Latest: FY2025
Profitability
Net Margin
12.5%
13.2% →12.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.75x
0.19x →0.75x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.39x
1.40x →1.39x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.5 pp over 3 years. Driven by asset turnover improving (0.19x → 0.75x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 13.2% | 0.19 | 1.40 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 15.6% | 0.19 | 1.36 | 4.1% |
| FY2025 | ₹0Cr | ₹0Cr | 12.5% | 0.75 | 1.39 | 13.0% |
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.