DuPont Decomposition
Why does HONDAPOWER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.0% = 7.4% × 0.84 × 1.28
Latest: FY2026
Profitability
Net Margin
7.4%
6.5% →7.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.84x
1.32x →0.84x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.28x
1.29x →1.28x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.1 pp over 5 years. Driven by asset turnover declining (1.32x → 0.84x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.5% | 1.32 | 1.29 | 11.1% |
| FY2023 | ₹0Cr | ₹0Cr | 6.9% | 1.32 | 1.26 | 11.6% |
| FY2024 | ₹0Cr | ₹0Cr | 9.4% | 0.99 | 1.22 | 11.3% |
| FY2025 | ₹0Cr | ₹0Cr | 10.1% | 0.76 | 1.21 | 9.3% |
| FY2026 | ₹0Cr | ₹0Cr | 7.4% | 0.84 | 1.28 | 8.0% |
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.