DuPont Decomposition
Why does BASML earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.7% = 0.8% × 0.87 × 2.42
Latest: FY2025
Profitability
Net Margin
0.8%
3.4% →0.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
1.24x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.42x
2.73x →2.42x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.9 pp over 4 years. Driven by net margin declining (3.4% → 0.8%), asset turnover declining (1.24x → 0.87x), leverage falling (2.73x → 2.42x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.4% | 1.24 | 2.73 | 11.6% |
| FY2023 | ₹0Cr | ₹-0Cr | -2.9% | 0.81 | 3.05 | -7.0% |
| FY2024 | ₹0Cr | ₹-0Cr | -2.4% | 0.74 | 3.08 | -5.5% |
| FY2025 | ₹0Cr | ₹0Cr | 0.8% | 0.87 | 2.42 | 1.7% |
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.