DuPont Decomposition
Why does BCPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.7% = 4.1% × 0.78 × 2.08
Latest: FY2025
Profitability
Net Margin
4.1%
7.0% →4.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.78x
1.02x →0.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.08x
1.32x →2.08x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.8 pp over 4 years. Driven by net margin declining (7.0% → 4.1%), asset turnover declining (1.02x → 0.78x), leverage rising (1.32x → 2.08x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.0% | 1.02 | 1.32 | 9.5% |
| FY2023 | ₹0Cr | ₹0Cr | 6.6% | 1.06 | 1.27 | 8.8% |
| FY2024 | ₹0Cr | ₹0Cr | 6.2% | 0.56 | 1.62 | 5.6% |
| FY2025 | ₹0Cr | ₹0Cr | 4.1% | 0.78 | 2.08 | 6.7% |
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.