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
12.6% = 7.7% × 0.17 × 9.73
Latest: FY2026
Profitability
Net Margin
7.7%
7.4% →7.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.17x
0.18x →0.17x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.73x
8.29x →9.73x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.3 pp over 5 years. Driven by leverage rising (8.29x → 9.73x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.4% | 0.18 | 8.29 | 11.3% |
| FY2023 | ₹0Cr | ₹0Cr | 8.7% | 0.18 | 8.74 | 13.8% |
| FY2024 | ₹0Cr | ₹0Cr | 8.2% | 0.19 | 8.92 | 13.5% |
| FY2025 | ₹0Cr | ₹0Cr | 7.8% | 0.17 | 9.01 | 12.3% |
| FY2026 | ₹0Cr | ₹0Cr | 7.7% | 0.17 | 9.73 | 12.6% |
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.