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
20.8% = 14.9% × 0.91 × 1.54
Latest: FY2025
Profitability
Net Margin
14.9%
19.1% →14.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.25x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.54x
1.20x →1.54x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 15.0 pp over 3 years. Driven by net margin declining (19.1% → 14.9%), asset turnover improving (0.25x → 0.91x), leverage rising (1.20x → 1.54x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 19.1% | 0.25 | 1.20 | 5.8% |
| FY2024 | ₹0Cr | ₹0Cr | 17.4% | 0.29 | 1.36 | 6.9% |
| FY2025 | ₹0Cr | ₹0Cr | 14.9% | 0.91 | 1.54 | 20.8% |
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.