DuPont Decomposition
Why does BALPHARMA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.3% = 2.4% × 0.90 × 4.34
Latest: FY2025
Profitability
Net Margin
2.4%
2.0% →2.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.90x
1.07x →0.90x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.34x
4.44x →4.34x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~9%. Driven by asset turnover declining (1.07x → 0.90x). 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 | 2.0% | 1.07 | 4.44 | 9.6% |
| FY2023 | ₹0Cr | ₹0Cr | 0.8% | 0.96 | 4.91 | 4.0% |
| FY2024 | ₹0Cr | ₹0Cr | 2.2% | 1.06 | 4.44 | 10.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.4% | 0.90 | 4.34 | 9.3% |
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.