DuPont Decomposition
Why does HPAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.7% = 2.8% × 1.07 × 1.24
Latest: FY2026
Profitability
Net Margin
2.8%
3.6% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.07x
0.84x →1.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.24x
1.42x →1.24x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~4%. Driven by asset turnover improving (0.84x → 1.07x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.6% | 0.84 | 1.42 | 4.4% |
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 1.26 | 1.25 | 7.3% |
| FY2024 | ₹0Cr | ₹0Cr | 8.7% | 1.19 | 1.17 | 12.2% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 1.10 | 1.24 | 9.9% |
| FY2026 | ₹0Cr | ₹0Cr | 2.8% | 1.07 | 1.24 | 3.7% |
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.