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
8.5% = 7.3% × 0.65 × 1.79
Latest: FY2025
Profitability
Net Margin
7.3%
2.3% →7.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.65x
0.18x →0.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.79x
2.45x →1.79x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.5 pp over 3 years. Driven by net margin improving (2.3% → 7.3%), asset turnover improving (0.18x → 0.65x), leverage falling (2.45x → 1.79x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.3% | 0.18 | 2.45 | 1.0% |
| FY2024 | ₹0Cr | ₹-0Cr | -22.4% | 0.18 | 2.75 | -10.8% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 0.65 | 1.79 | 8.5% |
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.