DuPont Decomposition
Why does BALAJEE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.6% = 4.5% × 0.96 × 1.76
Latest: FY2025
Profitability
Net Margin
4.5%
2.3% →4.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.96x
1.12x →0.96x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.76x
3.31x →1.76x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.1 pp over 4 years. Driven by net margin improving (2.3% → 4.5%), asset turnover declining (1.12x → 0.96x), leverage falling (3.31x → 1.76x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.3% | 1.12 | 3.31 | 8.6% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 1.18 | 2.78 | 11.6% |
| FY2024 | ₹0Cr | ₹0Cr | 5.6% | 1.01 | 2.45 | 13.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.5% | 0.96 | 1.76 | 7.6% |
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.