DuPont Decomposition
Why does BANKINDIA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.8% = 28.2% × 0.03 × 13.06
Latest: FY2025
Profitability
Net Margin
28.2%
16.2% →28.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.03x
0.03x →0.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
13.06x
13.32x →13.06x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.5 pp over 2 years. Driven by net margin improving (16.2% → 28.2%), leverage falling (13.32x → 13.06x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.2% | 0.03 | 13.32 | 6.3% |
| FY2025 | ₹0Cr | ₹0Cr | 28.2% | 0.03 | 13.06 | 11.8% |
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.