DuPont Decomposition
Why does BAJAJFINSV earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.9% = 7.3% × 0.19 × 5.08
Latest: FY2025
Profitability
Net Margin
7.3%
14.1% →7.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.19x
0.06x →0.19x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.08x
5.23x →5.08x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.6 pp over 3 years. Driven by net margin declining (14.1% → 7.3%), asset turnover improving (0.06x → 0.19x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.1% | 0.06 | 5.23 | 4.3% |
| FY2024 | ₹0Cr | ₹0Cr | 12.8% | 0.06 | 5.18 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 0.19 | 5.08 | 6.9% |
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.