DuPont Decomposition
Why does BAJAJHFL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.8% = 23.6% × 0.09 × 5.15
Latest: FY2025
Profitability
Net Margin
23.6%
19.2% →23.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.09x
0.08x →0.09x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.15x
7.20x →5.15x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~11%. Driven by net margin improving (19.2% → 23.6%), leverage falling (7.20x → 5.15x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 19.2% | 0.08 | 7.20 | 10.5% |
| FY2023 | ₹0Cr | ₹0Cr | 22.9% | 0.08 | 6.16 | 12.0% |
| FY2024 | ₹0Cr | ₹0Cr | 23.6% | 0.09 | 6.69 | 14.2% |
| FY2025 | ₹0Cr | ₹0Cr | 23.6% | 0.09 | 5.15 | 10.8% |
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.