DuPont Decomposition
Why does INDHOTEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.4% = 23.7% × 0.45 × 1.43
Latest: FY2025
Profitability
Net Margin
23.7%
20.9% →23.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.45x
0.12x →0.45x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.43x
1.71x →1.43x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.1 pp over 3 years. Driven by net margin improving (20.9% → 23.7%), asset turnover improving (0.12x → 0.45x), leverage falling (1.71x → 1.43x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 20.9% | 0.12 | 1.71 | 4.3% |
| FY2024 | ₹0Cr | ₹0Cr | 23.0% | 0.13 | 1.57 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 23.7% | 0.45 | 1.43 | 15.4% |
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.