DuPont Decomposition
Why does BAJAJ-AUTO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
27.7% = 17.8% × 0.78 × 1.99
Latest: FY2026
Profitability
Net Margin
17.8%
19.2% →17.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.78x
0.92x →0.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.99x
1.18x →1.99x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.0 pp over 5 years. Driven by net margin declining (19.2% → 17.8%), asset turnover declining (0.92x → 0.78x), leverage rising (1.18x → 1.99x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 19.2% | 0.92 | 1.18 | 20.6% |
| FY2023 | ₹0Cr | ₹0Cr | 17.1% | 1.01 | 1.20 | 20.6% |
| FY2024 | ₹0Cr | ₹0Cr | 17.6% | 1.11 | 1.36 | 26.6% |
| FY2025 | ₹0Cr | ₹0Cr | 14.9% | 0.91 | 1.54 | 20.8% |
| FY2026 | ₹0Cr | ₹0Cr | 17.8% | 0.78 | 1.99 | 27.7% |
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.