DuPont Decomposition
Why does BAJAJHCARE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.0% = 2.6% × 0.66 × 1.73
Latest: FY2026
Profitability
Net Margin
2.6%
10.5% →2.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.94x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.73x
2.20x →1.73x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 18.8 pp over 5 years. Driven by net margin declining (10.5% → 2.6%), asset turnover declining (0.94x → 0.66x), leverage falling (2.20x → 1.73x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.5% | 0.94 | 2.20 | 21.7% |
| FY2023 | ₹0Cr | ₹0Cr | 6.7% | 0.72 | 2.44 | 11.7% |
| FY2024 | ₹0Cr | ₹-0Cr | -17.7% | 0.62 | 2.75 | -30.1% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 0.65 | 1.79 | 8.5% |
| FY2026 | ₹0Cr | ₹0Cr | 2.6% | 0.66 | 1.73 | 3.0% |
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.