DuPont Decomposition
Why does BEML earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.1% = 7.6% × 0.65 × 2.03
Latest: FY2025
Profitability
Net Margin
7.6%
11.4% →7.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.65x
0.28x →0.65x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.03x
2.07x →2.03x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.6 pp over 3 years. Driven by net margin declining (11.4% → 7.6%), asset turnover improving (0.28x → 0.65x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.4% | 0.28 | 2.07 | 6.5% |
| FY2024 | ₹0Cr | ₹0Cr | 17.0% | 0.28 | 2.04 | 9.6% |
| FY2025 | ₹0Cr | ₹0Cr | 7.6% | 0.65 | 2.03 | 10.1% |
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.