DuPont Decomposition
Why does BAIDFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.5% = 16.6% × 0.18 × 2.54
Latest: FY2025
Profitability
Net Margin
16.6%
18.7% →16.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.18x
0.15x →0.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.54x
2.18x →2.54x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.5 pp over 4 years. Driven by net margin declining (18.7% → 16.6%), leverage rising (2.18x → 2.54x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 18.7% | 0.15 | 2.18 | 6.0% |
| FY2023 | ₹0Cr | ₹0Cr | 18.9% | 0.16 | 2.20 | 6.7% |
| FY2024 | ₹0Cr | ₹0Cr | 19.6% | 0.15 | 2.55 | 7.8% |
| FY2025 | ₹0Cr | ₹0Cr | 16.6% | 0.18 | 2.54 | 7.5% |
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.