DuPont Decomposition
Why does HUDCO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.4% = 116.7% × 0.02 × 7.59
Latest: FY2026
Profitability
Net Margin
116.7%
69.7% →116.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.02x
0.03x →0.02x
Revenue per ₹ of assets
Leverage
Equity Multiplier
7.59x
5.45x →7.59x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.5 pp over 5 years. Driven by net margin improving (69.7% → 116.7%), leverage rising (5.45x → 7.59x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 69.7% | 0.03 | 5.45 | 11.9% |
| FY2023 | ₹0Cr | ₹0Cr | 66.0% | 0.03 | 5.24 | 11.0% |
| FY2024 | ₹0Cr | ₹0Cr | 71.1% | 0.03 | 5.62 | 12.7% |
| FY2025 | ₹0Cr | ₹0Cr | 75.3% | 0.03 | 7.15 | 15.1% |
| FY2026 | ₹0Cr | ₹0Cr | 116.7% | 0.02 | 7.59 | 18.4% |
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.