DuPont Decomposition
Why does BBL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.9% = 7.1% × 0.72 × 1.35
Latest: FY2025
Profitability
Net Margin
7.1%
6.3% →7.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.72x
0.21x →0.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.35x
1.49x →1.35x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.9 pp over 3 years. Driven by asset turnover improving (0.21x → 0.72x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.3% | 0.21 | 1.49 | 1.9% |
| FY2024 | ₹0Cr | ₹0Cr | 8.3% | 0.23 | 1.34 | 2.6% |
| FY2025 | ₹0Cr | ₹0Cr | 7.1% | 0.72 | 1.35 | 6.9% |
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.